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Kenyon College

Publication Date

Fall 12-1-2014

Program Name

India: Sustainable Development and Social Change


Financial inclusion is an important step in development, as access to finances can help the poor build money and lift themselves out of poverty. In many parts of the developing world, and especially in India, microfinance is seen as a new approach to fighting poverty by bringing financial services, including low-interest loans, to the poor so that they can afford to start a business or invest and eventually gain self-sufficiency – in other words, a method of financial inclusion for the poor. However, microfinance in India cannot sufficiently reach the poor populations, especially those in rural India, and many of India’s rural poor still lack access to banks or microfinance institutions that could grant them access to financial services. Lack of financial literacy among borrowers is one of many factors leading to financial exclusion, for an understanding of finances is necessary to the utilization of financial services. Therefore, financial literacy initiatives that train borrowers in good financial practices and to make good financial decisions may offer a remedy to the shortcomings of microfinance in India. This study will use the example of a project by the Indian School of Microfinance for Women (ISMW) to explore the notion of financial literacy. It will observe the project’s methods through observation, and it will use personal interviews to explore the impact of financial education and other forms of training on borrowers and entrepreneurs. Ultimately, it will assess the effectiveness of initiatives to train and educate poor borrowers in increasing financial inclusion among the rural poor.


Asian Studies | Behavioral Economics | Economics | Educational Methods | Education Economics | Finance | Finance and Financial Management | Labor Economics | Other Economics | Women's Studies


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