Demystifying the Financial Inclusion Penetration by Customised Financial Instruments - A Demand Side Study Done on Rural Customers of India

Abstract

The microfinance sector in India witnessed mushrooming growth during the period 2010-11.The growth rate declined after the microfinance crisis. The high interest rate and huge bad debts attributes the micro-finance crisis. To get rid of the crisis the microfinance institutions in India introduced new financial products. Even then the growth rate is in a sluggish trend. Therefore, Indian policy makers are forced to evolve new financial products. In this context, we explores the viability of introducing new financial products bundled with non- financial products to penetrate the microfinance schemes. We explore the possibilities of integrating the financial inclusion schemes with microfinance products. We organised the research in three phases and justified it with case studies. We suggest that new financial products can be evolved by considering the occupational network of the clients and it is possible to integrate them with the financial inclusion schemes of Indian government.