Financial inclusion in India: an analysis from the user-side perspective

Purpose - The aim of the paper is to examine the status and determinants of financial inclusion in India by using the recent micro-level survey data. Design/methodology/approach - The authors construct a multidimensional financial inclusion index to measure the status of financial inclusion in the selected 17 states of India. Subsequently, the authors use the probit model estimation to examine the determinants of all financial inclusion indicators. Findings - The authors find that southern and north-eastern states perform better in the overall financial inclusion index. In contrast, states like Odisha, Madhya Pradesh, Chhattisgarh, Rajasthan and Uttar Pradesh lag behind. The estimated result shows that the probability of being financially included is higher among urban, richer, educated and salaried individuals. Further, the findings indicate the lower penetration of bank branches and ATMs in the rural parts of the country. Originality/value - While numerous studies have explored financial inclusion from a macro-level perspective, there exists a notable gap in the literature at the micro-level. This paper aims to address this gap and contributes to the existing literature in two ways. Firstly, it uses the recent micro-level survey data to construct a multidimensional financial inclusion index for the selected Indian states. Secondly, it examines individual-level attributes as the determining factors of financial inclusion, which has been overlooked in India. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-03-2023-0162