THE CONTEXT
The present report represents both continuity and
change. It is a successor to the annual reports of the state
of the sector in microfinance spanning the period 2006 to
2013. As the financial inclusion discourse has developed,
the
Microfinance India State of the Sector Reports
2011,
2012, and 2013 have examined and incorporated the
global and national trends in financial inclusion as also its
emerging architecture in India in terms of products and
services and methodology and infrastructure of delivery.
1
This report makes an attempt at tracking and analysing
the larger project of financial inclusion in India being
designed and implemented by the banking system as
also the other diverse stakeholders including technology
service providers, field support customer service agen-
cies, self-help groups (SHGs)/community organizations,
microfinance institutions (MFIs) and other government
programmes.
Financial inclusion appears to have become the prin-
cipal development concern of our times. This has been
particularly evident during the past decade or so, even as
the world has stumbled through a financial meltdown,
more serious than any since the Great Depression, that
has exposed the frailties and inequities of the global
financial system. Nevertheless, global attempts to bring
about ‘an increase in the proportion of individuals and
firms that use financial services’
2
continue apace. The
term ‘financial inclusion’ has acquired universal accep-
tance as both a mere access to financial services as well as
deeper processes. Much of the literature and discussion
is limited to increasing the extent of availability of bank-
ing and financial services to the unbanked rather than its
quality or sustainability. While there is a general consen-
sus about the many benefits of expanding the financial
markets to facilitate greater reach of credit, savings and
payments services to newer and under-banked segments
and to widen access to insurance and pensions, there are
also concerns about the plausible ill-effects like over-
indebtedness of customers and the stability of financial
markets. The appropriateness of financial services, espe-
cially for poorer segments of the population, has become
a critical concern too.
A host of measures aimed at enabling access to finan-
cial services of the poor have been undertaken during the
past several decades in India. These have largely formed
part of the efforts to achieve the planned goals of balanced
development and poverty alleviation mainly through
1
Inclusive Finance
Definitions, Perspectives, and Extent
