Impact of Cooperatives in Financial Inclusion & Comprehensive Development

Abstract

The promotion of an inclusive financial system is considered a policy priority in many countries. Financial inclusion is important for improving the living conditions of poor farmers, rural non-farm enterprises and other vulnerable groups. While the importance of financial inclusion is widely recognized, there is lack of assessment of the extent of financial inclusion based on credit flow to small borrowers in Indian economy. The liberalized, increasingly global, market driven economy of India today, has failed to facilitate inclusive growth. This paper attempts to fill this gap by evaluating the extent of financial inclusion and emphasises the active participation of cooperatives as important tools of financial inclusion in India.

Impact of financial inclusion on poverty alleviation through cooperative banks

“…The significance of cooperative banks has soared in recent years with the emergence of financial inclusion as a key thrust of public policy in India (Nayak, 2012). In spite of making significant improvements in all areas, cooperative banks have failed to include large sections of the society into the fold of basic financial services, especially the poor and vulnerable section of society due to poor infrastructure, lack of awareness, lack of quality management, lack of strong human resource policy, dormant membership and overdependence on government (Lakshmi and Visalakshmi, 2013;Kelkar, 2010). The literature on financial inclusion in cooperatives has shown that the exclusion from the cooperative financial system occurs to a person who belongs to a low-income group, the ethnic minorities, immigrants and the aged (Thorat, 2007;Yener, 2006).…”

“…Financial inclusion through cooperative banks is often considered as an effective way for poverty reduction, as access to finance enables economic agents to make long-term consumption and investment decisions, participate in productive activities and cope with unexpected short-term shocks (Caskey et al, 2006). It is both a vital link and considerable first step towards achieving compendious growth (Lakshmi and Visalakshmi, 2013). Access to finance, especially by the poor and helpless groups, is a pre-requisite for employment, economic growth, poverty reduction and social cohesion, as it provides them an opportunity to have a bank account, to save and invest, to insure their homes and facilitate them to break the chain of poverty (Rahman, 2009;Chakrabarty, 2011).…”

Impact of financial inclusion on technical efficiency of paddy farmers in Bangladesh

“…Financial inclusion is the process of receiving or delivering financial services and products at an affordable cost (Lakshmi and Visalakshmi, 2013). Generally, financial products and services include savings, credit, insurance and payments at an affordable cost with convenience, safety and dignity from mainstream financial institutions.…”

Assessment of Gender Access to Agricultural Loans From Cooperative Societies in Dekina Local Government Area of Kogi State, Nigeria

“…Credit co-operatives have been in operation since the early 20th century in many South Asian countries. Lakshmi and Visalakshmi (2013) reported that cooperatives cover each & every village of India. Cooperatives account for 46% of Agriculture Credit disbursement, Cooperatives aggregate people, resources and capital into economic units.…”

“…The financial inclusion was conceptualized as "The process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost". This has had a positive impact on the cooperatives in India (Lakshmi and Visalakshmi, 2013). In China and Pakistan, the sucesses of some agricultural cooperatives had led to the metamorphosis of some cooperatives into Agricultural banks offering the rural cooperators more economically viable opportunities (Rheman et al, 2015).…”