Demand-side analysis of measuring financial inclusion

Purpose - The purpose of this paper is to measure the financial inclusion dimensions from the perspective of beneficiaries (demand-side).This research additionally attempts to assess the impact of financial inclusion on socio-economic status of primitive tribal groups (PTGs) in India. Design/methodology/approach - Using an exploratory factor analysis, the financial inclusion dimensions are identified for a sample of 520 families belonging to PTGs in India. In the next step, reliability and validity test were used to establish the financial inclusion dimensions and socio-economic status factors through confirmatory factor analysis using analysis of moment structures. Finally, structural equation modeling (SEM) had been applied for testing the hypothetical relationships. Findings - The study documented five-dimensions of measuring financial inclusion from demand side perspective. The dimensions are as follows: physical proximity, availability, ease of access, affordability and usage. It was found that these factors represent the various dimensions of financial inclusion, which has a significant impact on socio-economic status of the beneficiaries. Research limitations/implications - The research results focus on dimensions of financial inclusion, which have an impact on the socio-economic status among the most PTGs in India. The research offers ideas to policymakers to outline strategies to enhance the access to and usage of financial services. Originality/value - The present research is one of the first few studies that present the demand-side perspective to assess the financial inclusion dimensions of the “financially most excluded” groups – PTGs in India using a SEM approach.