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Reforms in Institutional Finance for Inclusive Growth

Author

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  • Swamy, Vighneswara

Abstract

This paper analyses the need, significance and the advantages of ‘reforms in institutional finance for inclusive growth’ in the context of Indian economy and offers some practicable suggestions from the functional perspective. India’s Rural Financial Architecture (RFA) is subject to systemic policy issues and pervasive institutional weaknesses. Lack of autonomy and weak governance and unseen accountability have affected the sustainability of Rural Financial Institutions (RFI) and resulted in constrained outreach. Importance of access to institutional finance for the poor arises from the problem of financial exclusion of nearly 3 billion people from the formal financial services across the world. With only 34% of population engaged in formal banking, this paper argues that the reforms in institutional finance coupled with governance reforms in India’s RFA would greatly benefit the economy in making available the much-needed financial services to the poor and the neglected sections of the society and facilitate the efforts towards achieving inclusive growth.

Suggested Citation

  • Swamy, Vighneswara, 2014. "Reforms in Institutional Finance for Inclusive Growth," MPRA Paper 58337, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:58337
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    File URL: https://mpra.ub.uni-muenchen.de/58337/1/MPRA_paper_58337.pdf
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    References listed on IDEAS

    as
    1. Claude Menard & Mary M. Shirley (ed.), 2005. "Handbook of New Institutional Economics," Springer Books, Springer, number 978-0-387-25092-2, June.
    2. Swamy, Vighneswara, 2010. "Bank-based Financial Intermediation for Financial Inclusion and Inclusive Growth," MPRA Paper 47510, University Library of Munich, Germany.
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    Cited by:

    1. Ggombe Kasim Munyegera & Tomoya Matsumoto, 2015. "ICT for Financial Inclusion: Mobile Money and the Financial Behavior of Rural Households in Uganda," GRIPS Discussion Papers 15-20, National Graduate Institute for Policy Studies.

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    More about this item

    Keywords

    Development finance; Financial system; Rural financial institutions; Poverty; Governance; Reforms;
    All these keywords.

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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