A Comparative Study on Financial Literacy Initiatives of Small Finance Bank and Cooperative Society in India: An Exploration

Financial exclusion and social exclusion co-exist in India. Due to this factor, several generations are facing financial hardship and a lack of accessibility to education, employment, etc. Therefore, their financial and social status remains unchanged. Financial inclusion is required to break this barrier. Financial inclusion, financial literacy, and financial stability are the different dimensions of the integral strategy for inclusive economic growth in any country. In India, several microfinance institutions such as cooperative society, NBFC-MFIs, NGO-MFIs, and small finance banks are operating. These institutions are promoting financial inclusion through financial literacy for the marginalised sections of the population. The way of delivering financial literacy varies across different institutions. There is a variation in customers across different MFIs. It is important to understand how the oldest model of MFIs, such as credit cooperative society and the new model of MFIs, namely small finance banks (SFBs), have been implementing financial literacy programmes and at what stage of lending, these programmes are being delivered. The difference between these two organisational structures is that cooperative society is being owned by the customers, while SFB is owned by the investors/shareholders. This chapter aims to conduct a comparative study on financial literacy initiatives taken by a multistate credit cooperative society, Annapurna Mahila Credit Cooperative Society, and a small finance bank, ESAF Small Finance Bank, to address the goal of financial inclusion and financial stability. For this study, a case study method is adopted to understand the process of delivery of financial literacy in the studied organisations.