SYNOPSIS REPORT

on

“Rural household Banking habits and borrowing pattern: Insights from Gram Panchayat Islamganj,

District Shahjahanpur”

submitted in partial fulfillment of the requirement

for the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted to

DR. OMDEEP GUPTA

Designation

Graphic Era Hill University

Dehradun

Submitted by

GULREZ ANSARI

(23020177)

GRAPHIC ERA HILL UNIVERSITY, DEHRADUN

BATCH 2023 - 2025

i
 CERTIFICATE

TO WHOM IT MAY CONCERN

This is to certify that Mr. Gulrez Ansari student Of MBA-IV Semester in our institute has
successfully completed his project work entitled “Rural household Banking habits and
borrowing pattern: Insights from Gram Panchayat Islamganj, District Shahjahanpur”
for the partial fulfillment of the degree of Bachelor of Business Administration for the session
2023-2025.

Dr. Omdeep Gupta Dr. Vishal Sagar

(Project Guide) (HOD, MBA)

ii
 STUDENT DECLERATION

I, Gulrez Ansari a bonafide student of MBA IV sem (2023-2025) in GRAPHIC ERA HILL
UNIVERSITY, Dehradun would like to declare that the field survey report entitled “Rural
household Banking habits and borrowing pattern: Insights from Gram Panchayat
Islamganj ,District Shahjahanpur” submitted by me in partial fulfillment for the requirement
of the Degree of Master of Business Administration is my original work.

Place:

Date:

Signature of the candidate

Gulrez Ansari

Student ID: 23020177

Roll No. 40

iii
 ACKNOWLEDGEMENT

I will always remain deeply thankful to my teacher and supervisor Dr. Omdeep Gupta
(professor), Department of Management Graphic Era Hill University for his excellent guidance
and moral support at every step of my work. His vast knowledge, scientific character, critical
evolution, encouraging supervision and patient outlook have always have been a constant
source of inspiration for me. Apart from helping me understand the problem associated with it
he has made me realize the need and power of rationalism and optimism to conquer the
unknown, in this fast developing scientific world.

I am also thankful to my respected teacher Dr. Vishal Sagar (HOD MBA) for their valuable
suggestions, moral support, kind assistance and support to complete my project smoothly and
accurately. Without his help this work would have not seen the light of the day.

Gulrez Ansari
MBA (4)
2rd YEAR
23020177

iv
 TABLE OF CONTENTS

S.no. Particulars Page no.

1 Title Page I

2 Certificate II

3 Declaration III

4 Acknowledgement IV

5 Table of Content V

6 List of Table VI

7 List of Figure VII

8 Chapter-1 Introduction 1-8

9 Chapter-2 Literature Review 9-17

10 Chapter-3 Research Objective, Research 18-22

Methodology

11 Chapter-4 Data Interpretation and 23-30

Analysis

12 Chapter-5 Research Findings 31-48

13 Conclusion/ Limitation/ Research Scope 49-52

14 Bibliography/ References 53-55

15 Appendices 56-71

v
 LIST OF TABLES
S. No. Name of Table Page No.

1 Fig. 4.1 Graphical Representation of the 24

respondents by gender.

2 Fig. 4.2 Graphical Representation of the 25

respondents by Educational Qualification..

3 Fig. 4.3 Graphical Representation of the 27

respondents by Religion.

4 Fig. 4.4 Graphical Representation of the 28

respondents by Category.

5 Fig. 4.5 Graphical Representation of the 29

respondents by Occupation

7 Table 5.1 Banking Services 32

8 Table 5.2 Banking Operations 33
9 Table 5.3 Banking Awareness 35
10 Table 5.4 Household affected by Distress Events 36
11 Table 5.5 Banking services Usage in last 3 Months 37
12 Table 5.6 Insurance Coverage 39
13 Table 5.7 Source of Fund 40
14 Table 5.8 Reason for Not using Banking Services 41
for loans:

vi
 LIST OF FIGURES

S. No. Name of Figure Page No.

Fig. 4.1 Graphical Representation of the respondents by 24
1.
gender.

Fig. 4.2 Graphical Representation of the respondents by 25

2.
Educational Qualification..

Fig. 4.3 Graphical Representation of the respondents by 27

3.
Religion.

Fig. 4.4 Graphical Representation of the respondents by 28

4.
Category.

Fig. 4.5 Graphical Representation of the respondents by 29

5
Occupation

Fig. 4.6 Graphical Representation of the respondents by 30

6.
Economic Status

Fig 5.1 Banking Services 32

7.

Fig 5.2 Banking Operations 34

8.

vii
 Chapter- 1

INTRODUCTION

1
 INTRODUCTION

The evil moneylender, a staple of Bollywood movies in the 1970s and 80s, is not a figment of
a scriptwriter’s imagination. Even today, well over one-fifth of rural households borrow from
moneylenders, shows data from the Indian Human Development Survey (IHDS). That said,
there has been a decline in the reliance on moneylenders and more households are borrowing
from banks.

Borrowing from friends and relatives remained the biggest source of funds, though. That does
not necessarily reflect lack of access to bank credit. IHDS data shows that the average interest
rate charged by friends and relatives was between 0.8% and 1.8% per annum, compared to
average bank interest rate of 8.5% to 10.5%, depending on rural or urban areas.

Still, the average amount lent by friends/relatives was much lower than bank loans. Moreover,
as Chart 2 shows, richer, more educated and more endowed households tend to borrow more
from banks. This suggests that borrowing from friends and relatives, especially among poorer
households might be more on account of lack of options than preference.

CURRENT SCENARIO OF BANKING SECTOR IN INDIA

The Union finance minister recently said that the agriculture sector is the government’s top
priority because the country’s economic growth is not “justifiable and equitable" unless the
benefits are reflected in the farm sector. National Sample Survey Office (NSSO) data shows
that more than one-fifth of rural households with self-employment in agriculture have income
less than the poverty line. Agriculture labour productivity in terms of gross value added (GVA)
in India is less than a third of that in China and 1% of that in the US. In 2016, the government
had announced its intention of doubling farmer incomes by 2022. One big way in which farmer
incomes can get a boost is by improving farm productivity (ratio of agriculture output to
agriculture inputs).

2
The productivity of most crops in India is well below the global average. Farm productivity
can be improved through better irrigation facilities, technology improvement, diversifying
towards higher value added crops (like fruits, vegetables, spices, condiments), and increasing
crop intensity. Better price realization for farmers is the other big step that can help in
improving income. This is where cutting out the middlemen and introducing agriculture
marketing reforms becomes critical. There needs to be a mechanism in place to ensure that
agriculture prices do not fall below the minimum support prices (MSP). For instance, last year
we saw the prices of pulses fall below the MSP, causing distress to farmers. The model APMC
(agricultural produce market committee) law does propose reforms in the form of treating the
entire state as a single market, removal of fruits and vegetables from the purview of mandatory
trading in the APMC market, promotion of electronic trading, etc. However, a lot more needs
to be done in the area of agriculture marketing reforms.

FINANCIAL INCLUSION

“Financial Inclusion” was considered by the Committee:

“Financial inclusion may be defined 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.”

“Financial Inclusion is the process of ensuring access to appropriate financial products and
services needed by vulnerable groups such as weaker sections and low income groups at an
affordable cost in a fair and transparent manner by mainstream Institutional players”.

-RESERVE BANK 0F INDIA

3
 SAVINGS

BANK INSURANCE
ACCOUNTS

FINANCIAL
INCLUSION

FINANCIAL PAYMENT
ADVICE AND
REMITTANCE

AFFORDABLE
CREDIT

4
The Reserve Bank continued its efforts towards fulfilling the financial inclusion agenda during
the year to help realized the intended economic and social objectives. In this direction, several
new initiatives were undertaken during 2018-19.

A Committee of Executive Directors of the Reserve Bank was constituted to study the
efficiency of the Lead Bank Scheme (LBS) and suggest measures for its improvement

Under the LBS, one bank in each district is assigned the leadership role and acts as a
consortium leader to co-ordinate the efforts of the banks in that district, particularly in matters
such as branch expansion and credit planning to meet the credit needs of the district. The
assignment of lead bank responsibility to a designated bank in every district is done by the
Reserve Bank.

National Strategy for Financial Inclusion

In order to systematically accelerate the level of financial inclusion in the country in a

sustainable manner, the National Strategy for Financial Inclusion has been prepared under the
aegis of the FIAC and is based on the inputs and suggestions from the Government of India
and other financial sector regulators

Financial inclusion is increasingly being recognized world over as a key driver of economic
growth and poverty alleviation. Access to formal finance can boost job creation, reduce
vulnerability to economic shocks and increase investments in human capital. At a macro level,
greater financial inclusion can support sustainable and inclusive socio-economic growth for all.
To achieve the above objectives in a co-ordinated and time-bound manner, formulation of a
National Strategy for Financial Inclusion (NSFI) is essential. Globally, the adoption of the
National Financial Inclusion Strategy (NFIS) has been accelerated significantly in the past
decade. As of mid-2018, more than 35 countries, including Brazil, China, Indonesia, Peru and
Nigeria have launched an NFIS and another 25 countries are in the process of formulating a
strategy. Further, several countries have also updated their original NFIS (World Bank, 2018).
The National Strategy for Financial Inclusion for India 2019-24 has been prepared by the
Reserve Bank under the aegis of the Financial Inclusion Advisory Committee (FIAC) and is
based on the inputs and suggestions from the Government of India, other financial sector

5
regulators viz., Securities and Exchange Board of India (SEBI), Insurance Regulatory and
Development Authority of India (IRDAI) and Pension Fund Regulatory and Development
Authority (PFRDA). This document also reflects various outcomes from wide-ranging
consultations held with a range of stakeholders and market players, including National Bank
for Agriculture and Rural Development (NABARD), National Payments Corporation of India
(NPCI), Commercial Banks, Non-Governmental Organizations (NGOs), and Self-Regulatory
Organizations (SROs), etc. The document includes an analysis of the status and constraints in
financial inclusion in India, specific financial inclusion goals, action plan to reach the goals
and the mechanism to measure progress. The strategy envisages to make formal financial
services available, accessible, and affordable to all the citizens in a safe and transparent manner
to support inclusive and resilient multi-stakeholder led growth. It proposes forward looking
recommendations to help achieve universal access to financial services through a bouquet of
basic financial services leveraging on the BC Model, access to livelihood and skills
development, financial literacy and education, customer protection and grievance redressal
with effective co-ordination. While the various initiatives have helped in extending financial
services to the hitherto excluded sections of society, the strategy aims to focus on deepening
the reach, usage and sustainability of financial inclusion. The document was approved by the
Financial Stability and Development Council Sub-Committee on March 14, 2019.

Social Security Schemes under financial Inclusion

In order to move towards creating a universal social security system for all Indians, specially
the poor and the under-privileged, three ambitious Jan Suraksha Schemes or Social Security
Schemes pertaining to Insurance and Pension Sector were announced by the Government in
the Budget for 2015-16. The schemes were launched on 9th May, 2015, for providing life &
accident risk insurance and social security at a very affordable rate. People in the age group 18
to 70 years with a bank / Post office account who give cost namely (a) Pradhan Mantri Suraksha
Bima Yojana and (b) Pradhan Mantri Jeevan Jyoti Yojana and (c) Atal Pension Yojana.

6
Pradhan Mantri Suraksha Bima Yojana (PMSBY)

The Scheme is available to their consent to join / enable auto-debit on or before 31st May for
the coverage period 1st June to 31st May on an annual renewal basis. Aadhar would be the
primary KYC for the bank account. The risk coverage under the scheme is Rs. 2 lakh for
accidental death and full disability and Rs. 1 lakh for partial disability.

The scheme is being offered by Public Sector General Insurance Companies or any other
General Insurance Company who are offering the product on similar terms with necessary
approvals and tie up with Banks and Post Offices for this purpose.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The scheme is available to people in the age group of 18 to 50 years having a bank/ Post office
account who give their consent to join / enable auto-debit. Aadhar would be the primary KYC
for the bank account. The life cover of Rs. 2 lakhs is available for a one year period stretching
from 1st June to 31st May and is renewable. Risk coverage under this 2 scheme is for Rs. 2
Lakh in case of death of the insured, due to any reason.

Atal Pension Yojana (APY)

Atal Pension Yojana is being implemented with effect from 1st June, 2015. The Scheme aims
to provide monthly pension to eligible subscribers not covered under any organized pension
scheme. APY is open to all bank and post office account holders in the age group of 18 to 40
years. Under APY, any subscriber can opt a guaranteed pension of Rs 1000 to Rs 5000 (in
multiples of Rs. 1,000) receivable at the age of 60 3 years. The contributions to be made vary
based on pension amount chosen.

The APY is primarily focused on all citizens in the unorganized sector, who join the NPS.
However, all citizens of the country in the eligible category may join the scheme.

Any Indian Citizen between 18-40 years of age can join through their savings bank account or
post office savings bank account.

7
 Overview of Research Area

Islamganj is a Gram Panchayat located in Jalalabad Tehsil of Shahjahanpur district in Uttar

Pradesh, India. It is situated 1 km away from sub-district headquarter Allahganj and 25 km
away from district headquarter Jalalabad.

The total geographical area of Gram Panchayat is 3000 hectares. Gram Panchayat Islamganj
has a total population of 7000 peoples. There are about 2500 houses in Gram Panchayat
Islamganj. Allahganj is nearest town to Gram Panchayat Islamganj which is 1 km away.

Total Number of Household: 2500

Gram Panchayat Islamganj 2011 Census Details

Islamganj’s Local Language is Hindi. Islamganj’s Total population is 7000 and number of houses are
2500. Female Population is 45%. Gram Panchayat literacy rate is 60% and the Female literacy rate is
50%.

Population
Census Parameter Census Data

Total Population 7000

Total No of Houses 2500

Female Population % 45% ( 3150)

Total Literacy rate % 60% ( 4200)

Female Literacy rate 50 % ( 1575)

Scheduled Tribes Population % 0.0% ( 0)

Scheduled Caste Population % 20% (1400 )

Working Population % 30% (2100)

Child(0 -6) Population by 2011 20% (1400)

Girl Child(0 -6) Population % by 2011 40% (560)

8
Chapter – 2
Literature
Review

9
 Literature Review

Dercon & Krishnan (1996): A rural household may have a plot of land, purchase
consumer goods and inputs in local markets, and grow crops both for subsistence and
for sale. In addition, it might engage in local crafts and trades, hire out its labour and
keep livestock. The household might receive remittances from relatives away in town
and help in a crisis from neighbours. As in most developing countries, rural households
are usually engaged in various activities both within and outside agriculture. This
research will be descriptive. They might achieve lower variability in incomes in variety
of ways; by diversifying crops and plots, finding employment off-farm and through
migration to other areas or to the town.

Ellis (1998): this article reviews the recent literature on diversification as livelihood
strategy of rural households in developing countries with particular reference to sub-
Saharan Africa. Livelihood diversification is defined as the process by which rural
families construct a diverse portfolio of activities and social support capabilities in order
to survive and to improve their standards of living. The determinants and effects of
diversification in the areas of poverty, income distribution, farm output and gender are
examined. Some policy inferences are summarized. This research will be descriptive.
These findings portray a different sequence of events from the growth linkage approach.
They relate to situations where buoyant non-farm labour markets cause an exodus of
certain types of labour from the farm. The non- farm labour markets may be in cities,
export processing zones, general manufacturing or mining industries. The jobs on offer
may be gender differentiated or require particular skills or levels of education.

Nidhiya Menon & Yana van der Meulen Rodgers (2011): our objective in this
research is to examine whether greater access to financial resources increased the
likelihood of self-employment in India’s rural sector, and whether responses differed
along gender lines. This research will be descriptive. Our finding that the credit
expansion had relatively stronger effects for women contributes to an expanding
literature, but one with conflicting results, on the impact of credit on economic activity
in developing countries. The estimation results begin with findings from the base
regressions for the likelihood of self-employment regressed on the complete set of
individual and household. Our findings emphasize the importance of credit in helping
people to earn a livelihood from their own trade or business.

Espalier , Govindan, Venkatasubramanian (2013) Not only the share of

microfinance in aggregate rural credit remains negligible, but it seems that quantitative
objectives were achieved at the expense of quality. This research will be descriptive.

10
Our qualitative analysis also provides a useful complement to the finding that Dalits
use less private moneylenders and pay them more. Private lenders cover a broad
spectrum of more or less contractual relations, embedded within various degrees of
social and political relationships.

KIMTY SENG (2017): the primary objective of the study analyses the effects of
microcredit on household welfare in terms of household expenditure per capita in
Cambodia, with data from the Cambodia Socio-Economic Survey carried out in 2014.
The analysis describes the effects via formal and informal lending sectors, accounting
for endogenous selection bias arising from unobserved factors and for structural
differences between borrowers and non-borrowers in terms of expenditure functions.
This research will be descriptive. The findings suggest that microcredit in both sectors
reduces household expenditure.

Ralitza Dimova & Olabimtan Adebowale (2017): the General Household Surveys
(GHS) panel data for Nigeria, which is part of the Living Standard Measurement
Surveys (LSMS) project of the World Bank. The surveys, conducted by the Nigeria
Bureau of Statistics (NBS) with technical support from the World Bank, contain
information on household income, expenditures and demographic the sampling
procedures for the first wave are designed in a way that ensures national
representativeness. The objective of the second wave was to re-interview households in
the first wave. While households were tracked when they moved to a new dwelling,
including when they moved to new communities, individual members were not track
they have find out to what extent finance is a key determinant of inter-household
welfare inequalities and weigh the role of access to finance against alternative sources
of these inequalities if they moved out due to splitting off of households. This research
will be descriptive in this research paper. find that relatively worse off households
benefit disproportionately from formal financial sector inclusion, while improvement
of geographic access stimulates not only individual household inclusion, but also the
indirect positive implications of other factors like education and urban-rural residence,
policies aimed at enhancing inclusion should continue to be a priority.

Zhang, Posso” (2017): Using national representative household finance survey data
covering more than 6200 Chinese households, we first construct a new
multidimensional indicator for financial inclusion. Then we examine the effect of
financial inclusion on household income. Informed by this growing evidence, in both
developing and developed countries, policy-makers and regulators are undertaking
initiatives to priorities financial inclusion and financial sector development. This
research will be descriptive research. Our results elicit several findings. First, financial
inclusion has a strong positive effect on household income. This effect can be found
across all households with different levels of income. Second, low-income households
are found to benefit more from financial inclusion than high and mid-level income ones.
We argue that, in this sense, financial inclusion helps reduce income inequality.

11
 Adjognon, Liverpool-Tasie & ROBERT SHUPP” (2019) : Improving rural credit
markets requires a good understanding of the root causes of market failure and taking necessary
steps to address them. This paper investigates the role of productivity shocks in borrower
repayment choices. Using a framed field experiment that simulated a repeated interaction in an
input credit market, the analysis finds strong evidence that adverse productivity shocks lead to
higher default, even when they do not induce negative returns. This relationship is robust to the
presence of an information exchange system enforcing dynamic incentives. This research will
be descriptive research. The findings suggest that recurrent shocks such as those resulting from
the harmful effects of climate change could exacerbate failures in rural credit markets,
undermining hard-won progress toward rural financial inclusion. The findings are fairly robust
to the existence of credit information exchange mechanisms (such as credit bureaus)
increasingly promoted as a pathway towards broader financial inclusion. The implications of
these findings are important as climate change and its negative effects are increasingly
undermining agricultural production, especially in poor communities with low resilience.

Gorodzeisky: The analysis compares households with and without overseas workers to
estimate the contribution of remittances to household income and to household standard of
living (measured once by an ‘objective’ indicator and once by a ‘subjective’ assessment). The
data reveal that due to remittances the income of households with overseas labor migrants is
considerably higher than the income of households without overseas workers. The data also
reveal that remittances are used mostly for consumption purposes (e.g. purchase of food,
clothing, education, and goods) and that most of the difference in standard of living (whether
measured on the ‘objective’ or the subjective’ scale) between households with and without
overseas workers. This research will be descriptive. We first review previous literature on the
role of remittances; next, we outline our theoretical expectations within the context of the
Filipino society (a society in which labor migration is an official policy of the government).
Second, we discuss the data source on which the study is based and the variables utilized in the
analysis. Third, we analyze the data in order to provide estimates of the net effects of
remittances on both household income and standard of living.

Godinez (2016): financial inclusion, broadly defined as access to financial services, is

expanding globally but remains a key issue for policymakers worldwide. In particular, it is an
important public policy goal that directly relates to central banks’ key objectives and activities
(Mehrotra and Yetman (2015)). Financial inclusion can contribute to sustaining economic
welfare and to reducing poverty. But first and foremost, central banks emphasized that they
make indirect contributions to financial inclusion by pursuing their traditional objectives of
price and financial stability. Respondents saw little or no conflict in reconciling the objectives

12
of financial inclusion on the one hand and financial stability on the other. This research will be
descriptive. Feedback suggests that important benefits can be derived from collaboration with
international groupings in the area of financial inclusion. Between one fifth and one third of
them already contribute to international data collection frameworks and initiatives, such as
those of the World Bank (Global Findex Initiative), the OECD (International Network on
Financial Education), the IMF (Financial Access Survey), the Alliance for Financial Inclusion,
the Global Partnership for Financial Inclusion and the Consultative Group to Assist the Poor.

Justyna, Pytkowska(2019): While financial inclusion as a policy goal and economic

objective is well supported, measuring financial inclusion on a country level remains a
challenge. The paper proposes a novel approach to measuring financial inclusion in the EU
(financial inclusion score) using data envelopment analysis (DEA) and treating financial
inclusion as efficiency with which a financial system transforms inputs (key dimensions related
to demand, supply and policy) into outputs (use of financial services). Using the DEA method,
a financial inclusion index is calculated as a relative measure of ranking of a country’s financial
system in relation to the best in class, as it is identified by the DEA optimization method. The
findings help to operationalize the measure of financial inclusion and offer a simple composite
index that is easy to understand, monitor and implement. the literature: increases in
individualism and uncertainty avoidance lead to increases and decreases in both market
capitalization and international financing, respectively while higher levels of masculinity and
conservatism were associated with greater debt levels.

Leics: In this paper it is suggested that current debates on financial exclusion are often too
narrowly drawn and institutionally focused. As a consequence, less recognition is given to the
availability and use of other regulated financial services such as mail order and money lending.
All the studies are qualitative and, although together they further our understanding of low-
income financial resources, they did not necessarily collect comparable data (because their
primary objectives often differed) and so they do not contribute equally to the discussion of all
the issues touched on below. This research will be descriptive. These processes point to two
important conclusions. First, social relationships play a central role in economic transactions,
such as money lending and mail order, in poor communities. Second that even amongst lenders
clearly focused towards the poor processes of exclusion continue. In the remainder of this paper
we develop these findings a little further. A number of studies by Trading Standards
Departments have documented the operation of loan sharks, particularly in the poorest local
authority areas, findings consistent with what has been reported about the grounds on which
licensed moneylenders are likely to exclude.

Cynthia, Kinnan: the impact of microfinance access on other forms of borrowing. A sizable
fraction of the clients report repaying a more expensive debt as a reason to borrow from
Spandana, and we do indeed see some action on this margin. The share of households who

13
have some informal borrowing—defined as borrowing from family, friends, or moneylenders
or purchasing goods on credit extended by the seller. The point estimate of the amount
borrowed from informal sources is also negative, suggesting substitution of expensive
borrowing with cheaper MFI borrowing (an explicit objective of Spandana), and the point
estimate, though insignificant, is quite similar in absolute value to the increase in MFI
borrowing. This research will be descriptive analysis. 1An alternative way to measure the
impact of borrowing is to randomize microcredit offers among applicants. This approach was
pioneered by Karlan and Zinman (2010), who use individual randomization of the “marginal”
clients in a credit scoring model to evaluate the impact of consumer lending in South Africa,
finding that access to microcredit increases the probability of employment. The authors use the
same approach to measure impact of microcredit among small businesses in Manila (Karlan
and Zinman 2011).

Liverpool-Tasie: Financial inclusion provides the unbanked with an opportunity to break free
from the vicious cycle of poverty by giving them access to tools that allow them to securely
pay, save, borrow and insulate themselves from financial shocks. In addition to important
benefits at the individual level, financial inclusion also creates a number of macro- economic
benefits. As a result of the growing public sector focus on financial inclusion across the globe,
coupled with increasing provider interest in servicing the unbanked, more and more people are
becoming “financially included”. This research will be descriptive research. For bankers and
other financiers, SMEs have always been a difficult market because of the large cash element
of their businesses. Finding out what’s really going on, and then keeping abreast of changes,
requires physically going out and checking on the entrepreneur – expensive, and a deal breaker
for many considering financing. So much would be easier if that SME would do more business
electronically. For some time, the technology has existed to make this possible, and recent
innovations in mobile phone transactions have opened up new, promising opportunities.

Agyekum and Locke and Wellalage: Many theories exist in explaining why financial
intermediaries exist. From the ‘information asymmetry and transaction cost paradigms’,
‘regulation arguments’, to the delegated monitoring (Diamond, 1984), and the recent, ‘risk
management views’ (Scholtens & van Wensveen, 2003), frantic attempts have been made in
explaining the raison d’être of financial intermediaries (FIs). However, none of these theories
has perceived the FI as a firm whose raison d’être and primary objective is to maximize profit.
Besides none of these theories provides a clear linkage between the raison d’être of FIs and
why exclusion exists. This gap is filled through a simple model proposition in this paper. This
research will be descriptive. The model predicts that excessive fiscal borrowing, market
imperfection that allows ‘arbitrage value’ to be exploited, and excessive taxation, tend to widen
the financial exclusion gap for the private agent. In contrast, growth in income and private
investments tend to reduce the exclusion gap, hence, inclusion stimulating. The policy direction
is curved towards choices that will minimize the tendencies and prevalence of financial
exclusion in economies, especially the developing world.

14
Andrew and Thrift: this paper has two main objectives. The first is simply to document these
exclusionary processes, drawing upon evidence from the United States and Britain. The second
is to begin to formulate an alternative agenda that will foster resistance and help to construct
institutional alternatives which will deliver basic banking and low-cost loans to low-income
households. This research will be descriptive. the financial system during the 1980s are finding
themselves on the 'outside' in the 1990s, as they are expelled through the simple device of banks
closing their accounts, or as they leave 'voluntarily' by closing their accounts to avoid the
punishing charges incurred when over- draft limits are exceeded.

Isaqzadeh & Shapiro: These areas are also where the least evidence exists on how to tackle
poverty. This paper investigates whether the Targeting the Ultra Poor program can lift
households out of poverty in a fragile context: Afghanistan. In 80 villages in Balkh province,
1,219 of the poorest households were randomly assigned to a treatment or control group.
Women in treatment households received a one-off “big- push” package, including a transfer
of livestock assets, cash consumption stipend, skills training, and coaching. This research will
be descriptive. To better understand the source and use of loans, we explore conditional
outcomes among the set of households that have an existing loan, although given the
differential selection across treatment and control, these findings should be interpreted
cautiously (not shown). The results from robustness checks suggest that findings from the
primary specification are highly stable, supporting the validity of the results. This result may
also be explained by measurement errors in estimating the value of households’ asset holdings,
and could also mask heterogeneous impacts, where a portion of the households consume part
of the assets while others accumulate over time.

Locke and Wellalage: The concept thrives on the recognition that a significant section of
society is excluded from participating in the formal financial sector, and seems to have taken
center stage on the global policy agenda in recent times (UNSGSA-Annual Report, 2016).
None of these theories has perceived the FI as a firm whose raison d’être and primary objective
is to maximize profit. Besides none of these theories provides a clear linkage between the raison
d’être of FIs and why exclusion exists. This gap is filled through a simple model proposition
in this paper. This research will be descriptive. The role fiscal deficit financing that crowds-
out the private sector completely plays towards exclusion is also emphasized. The model
predicts that excessive fiscal borrowing, market imperfection that allows ‘arbitrage value’ to
be exploited, and excessive taxation, tend to widen the financial exclusion gap for the private
agent. In contrast, growth in income and private investments tend to reduce the exclusion gap,
hence, inclusion stimulating. The policy direction is curved towards choices that will minimize
the tendencies and prevalence of financial exclusion in economies, especially the developing
world.

15
Prasad, Sahasranaman, Sadhu, and Khaitan: This paper’s objectives were two-fold: first,
to understand the composition of the asset portfolios of rural households in India; and second,
to compare the performance of the extant portfolios with a hypothetical portfolio of financial
assets. We found that almost the entire asset portfolio (93%) of the average rural household in
our sample is composed of two assets—housing and jewellery. We also found that a majority
(56%) of the households in our sample are dependent solely on a single source of income tied
to the local area in which they operate. With the jobs and assets of rural households tied to the
local economy, it is evident that they are particularly vulnerable to local, systematic risks.
Further, three assets—land, livestock, and jewellery (gold)—constitute the suite of investment
assets available to these households .this research will be descriptive. There are discrepancies
between the findings of positive household finance (what households actually do) and
normative household finance (what households ought to do). For instance, household portfolios
are typically analysed within the framework of lifecycle models, which postulate that
households follow a “hump-shaped” asset accumulation pattern. The hump-shaped pattern
suggests that households build up their asset portfolios over their working years and draw upon
them after retirement. Poterba and Samwick (2001) challenged the central assumption of
lifecycle models and found that all assets within the asset portfolio need not follow the hump-
shaped pattern.

Jyoti & Kumar: the main causes of urban poverty, migration from rural areas, often remains
unaddressed. Migrant workers’ financial and other basic needs do not get adequate attention of
the government and policy makers. Urban poverty received due attention of the government
only in the ninth plan (1997-2002) primarily through the scheme Swarna Jayanti Shahari
Rozgar Yojana (SJSRY). This particular scheme was the amalgamation of three earlier
schemes: Nehru Rozgar Yojana (NRY), Urban Basic Services for the Poo (UBSP) and Prime
Minister’s Integrated Urban Poverty Eradication Program (PMIUPEP). The key objective of
SJSRY was to create employment opportunities for the urban unemployed population through
self-employment initiatives, wage employment and necessary skill-based training. This
research will be descriptive. These findings are pertinent to other contexts where similar
microfinance institutions are increasingly developing savings products for the poor. But such
programs also need to be attentive to local institutional frameworks. The women we selected
for our study were relatively young. Around 65 percent of them were below the age of thirty
five. These young women were energetic and had the zeal to succeed and uplift their families
to a higher income trajectory. Most of the women were Hindu (96%) and belonged to the
backward or the most backward classes.

Field & Pande & Rigol: This treatment increased women’s work, both in the program and
in the private sector, despite no change in market wages. Treatment effects are concentrated
among two groups of women: those who had not previously worked for the program and those

16
whose husbands disapprove of women working. These results are at odds with a model of
household behavior in which labor force participation decisions only depend on wages and
own-preference for leisure. Instead, we argue that they are consistent with a model in which
gender norms internalized by men limit women’s labor market engagement. This research will
be descriptive. We find no evidence that plausible fixed costs (e.g. childcare needs) mediate
our treatment effects. Similarly, the large extensive margin results for women, coupled with
our finding that male labor supply did not decline, suggests that the intervention did not realize
its impacts by simply making it more difficult for men to appropriate women’s wages.

KONING AND MURTHY: A farmer divides income from various sources into expense
associated with specific. Instead of spending money on her own family, a mother buys food for
her neighbor’s wedding. What initially appears to be a counterintuitive choice, actually gives
the family “insurance” against future shocks. Low-income people actively cultivate
relationships with others—family, friends, employers, local stores, moneylenders, and even
financial institutions who can help them in times of need. This research will be descriptive. The
dynamic nature of the lives of the urban poor. The tool supports staff and agents to segment the
customer base by capturing information on five key areas: events, attitudes, businesses,
household composition, and finances. Families provide details upon enrollment and update
profiles as the relationship pro- grasses. In addition to being a tool to assess financial progress,
Kaleido has evolved into a rich source of data for developing new products.

Elaine & Finney & Poppe: This study also developed an a priori conceptual model of
financial capability, which drew on the adult financial capability framework which was
developed by the Financial Services Authority and the Basic Skills Agency (Basic Skills
Agency, 2004), supplemented by a review of other research and literature. It identified three
key elements that seemed to determine capable financial behaviours: knowledge and
understanding, skills and confidence and attitudes. This research will be descriptive. The
findings of previous research are, at best, equivocal about the role that financial knowledge and
skills play in determining various behaviours and, any effects found tend to be small. In part,
this variation may be attributable to a wide diversity in the types of knowledge and skills being
studied. Findings make sense; whereas a stricter attitude to key financial behaviours is often
favourable to building resilience, the opposite may very well be true for feeling comfortable
financially since a perception of having room to man oeuvre financially is probably a crucial
part of it.

17
 CHAPTER-3

RESEARCH
OBJECTIVES
AND
METHODOLOGY

18
 RESEARCH OBJECTIVES
The main objectives of the study are enumerated as:

1) To study the awareness and usage pattern of financial products.

2) To study the source and composition of fund arranged by rural households.

3) To Analyze Passbook of rural household to check their banking pattern.

RESEARCH METHODOLOGY

Research methodology is the way in which research problem are solved systematically. It is a
science of studying how research is conduct technically. The term research is also used to
describe an entire collection of information about a particular subject. Research is defined as
human activity based on intellectual application in the investigation of manner. Business
research can be defined as a systematic and objective process of gathering, recording and
analyzing data that provides information to guide business decisions.

Sample Area: Gram Panchayat Islamganj is located in Jalalabad tehsil of Shahjahanpur

district in Uttar Pradesh. It is situated 25 km away from district headquarter Jalalabad and 65
km away from district headquarter Shahjahanpur.

The total geographical area of village is 3000 hectares. Gram Panchayat Islamganj has a total
population of 7000 peoples. There are about 2500 houses in Gram Panchayat Islamganj.
Allahganj is nearest town to Shahjahanpur which is approximately 65 km away.

Total Number of Household: 2500

Gram Panchayat Islamganj 2011 Census Details

Gram Panchayat Islamganj Language is Hindi. Gram Panchayat’s Total population is 7000 and

number of houses are 2500. Female Population is 45%. Village literacy rate is 60% and the

Female Literacy rate is 50%.

19
Population

Census Parameter Census Data

Total Population 7000

Total No of Houses 2500

Female Population % 45% ( 3150)

Total Literacy rate % 60% ( 4200)

Female Literacy rate 50 % ( 1575)

Scheduled Tribes Population % 0.0% ( 0)

Scheduled Caste Population % 20% (1400 )

Working Population % 30% (2100)

Child(0 -6) Population by 2011 20% (1400)

Girl Child(0 -6) Population % by 2011 40% (560)

Table 3.1 Sources : Census report 2011

20
 Source: Google map

Figure 3.1 Map showing location of Gram Panchayat Islamganj

RESEARCH DESIGN
Research design is defined as the framework of methods and techniques chosen by the
researcher to combine various components of research in a reasonably logical manner so that
the research problem is efficiently handled. It provides insights about “how” to conduct
research using a particular methodology. Every researcher has a list of research questions which
need to be assessed-this can be done with research design.

The research design of my study is descriptive.

Descriptive research
Descriptive research is used to describe characteristics of a population or phenomenon being
studied. It does not answer questions about how/when/why the characteristics occurred. Rather
it addresses the "what" question (what are the characteristics of the population or situation
being studied?) The characteristics used to describe the situation or population are usually some
kind of categorical scheme also known as descriptive categories. The description is used for
frequencies, averages and other statistical calculations. Often the best approach, prior to writing
descriptive research, is to conduct a survey investigation. Qualitative research often has the aim
of description and researchers may follow-up with examinations of why the observations exist
and what the implications of the findings are.
Descriptive research can use both qualitative and quantitative research methods. The research
design should be carefully developed to ensure that the results are valid and reliable.

21
Sample size 50

Sample unit Households

Sample area Open survey

Data collection time 6 days (10th December 2021-15th December 2021)

Research design Descriptive Research

Collection of data Field Survey

22
 CHAPTER-4
DATA
PRESENTATION
AND
INTERPRETATION \

23
 1. Gender

Gender
Cumulative
Frequency Percent Valid Percent Percent

Valid Male 50 100.0 100.0 100.0

Table no. 4.1 Frequency distribution of the responded by Gender.

Fig 4.1 Graphical distribution of the responded by gender

SOURCE: Field Survey December 2021

DATA REPORTING

The above Table shows the frequency distribution of the respondent on the basis of Gender
out of 50 respondent, 100% respondents are male and 0% respondents are females.

DATA INTERPRETATION

As per the data mentioned above, it is concluded that all the respondents are males and there
are no female respondents.

24
 2. Educational Qualifications

Educational qualification

Frequency Percent Valid Percent Cumulative Percent

Valid Illiterate 6 12.0 12.0 12.0

Primary 5 10.0 10.0 22.0

Metric 13 26.0 26.0 48.0

Intermediate 24 48.0 48.0 96.0

Graduation 2 4.0 4.0 100.0

Total 50 100.0 100.0

TABLE4.2 Frequency distribution of respondent on the basis of Educational Qualification.

Fig 4.2 Graphical representation of the respondent on the basis of Educational Qualification.
SOURCE: Field survey December 2021

25
DATA REPORTING:

The above figure shows the frequency distribution of the respondent on the basis of educational
qualification. Out of 50 respondent 48% people are Intermediate, 26% people are Metric, 12%
people are Illiterate, 10% people are primary educated and 4% are Graduated.

DATA INTERPRETATION:

As per the data mentioned above, it is concluded that the majority of the respondents are
Intermediate and Some of them are Metric and minority belong to other categories.

26
 3. Religion
Religion
Cumulative
Frequency Percent Valid Percent Percent

Valid Hindu 44 88.0 88.0 88.0

Muslim 4 8.0 8.0 96.0
Sikh 2 4.0 4.0 100.0
Total 50 100.0 100.0
TABLE 4.3 Frequency distribution of the respondent on the basis of Religion.

Fig 4.3 Graphical representation of the respondent on the basis of Religion.

DATA REPORTING:
Table 4.3 above shows the frequency distribution on the basis of Religion.
88 % of the respondent is following Hinduism, 8 % of respondent follow Islam, 4 %
respondent follow Sikhism and 0% follow other religion.
DATA INTERPRETATION:
According to table 4.3 majority of the respondents follow Hinduism Few of them
follow Islam, Very few of them follow Sikhism and no one follow Christian.

27
 4. Category

Category
Cumulative
Frequency Percent Valid Percent Percent

Valid General 8 16.0 16.0 16.0

OBC 38 76.0 76.0 92.0
SC 4 8.0 8.0 100.0
Total 50 100.0 100.0
(Source: Field Survey, December 2021)

TABLE: 4.4 (Frequency distribution of Category)

FIGURE-4.4(Graphical representation of Category)

DATA REPORTING- The above figure shows that 8% of families belong to SC Category
and 0% families belong to ST Category whereas 16% are of General category and OBC are
76%.

DATA INTERPRETATION- On the basis of above diagram it can be seen that majority of
families belong to OBC Category.

28
 5. Occupation:

Occupation
Cumulative
Frequency Percent Valid Percent Percent

Valid Farmer 42 84.0 84.0 84.0

Agricultural Labour 7 14.0 14.0 98.0
Self Employed 1 2.0 2.0 100.0
Total 50 100.0 100.0

(Source: Field Survey, December 2021)

TABLE-4.5 (Frequency distribution of Occupation of Family Head)

FIGURE-4.5 (Graphical representation of Occupation of family head)

DATA REPORTING- The above figures shows that 84% families depend on Farming,14%
are agricultural labour and 2% are self-employed ,0% are private employee and,0% are
government employee, and self-employee or construction labours.

DATA INTERPRETATION- On the basis of above diagram it can be seen that majority of
Families are indulge in Farming.

29
 6. Economic status

Economic Status
Cumulative
Frequency Percent Valid Percent Percent

Valid BPL 48 96.0 96.0 96.0

APL 2 4.0 4.0 100.0
Total 50 100.0 100.0
(Source: Field Survey, December 2021)

TABLE-4.6 (Frequency distribution of Economic Status of Family)

FIGURE-4.6 (Graphical representation of Economics Status of Family)

DATA REPORTING – The above figure shows that 96% of families are of below Poverty
Line, and only 4% are of Above Poverty line.

DATA INTERPRETATION- On the basis of above diagram it can be seen that the majority
of families are Below Poverty Line Status.

30
Chapter – 5
Research
Findings

31
Table 5.1 Banking Services:

Banking Services Count Percentage %

Part of Banking Awareness Camp Yes 11 22.0%
No 39 78.0%
Have you ever been a part of financial Yes 3 6.0%
planning No 47 94.0%
Any Bank Representative visited your Yes 8 16.0%
area No 42 84.0%
Have u been a Part/heard of any illegal Yes 0 0.0%
activity charged from the Bank No 50 100.0%

60

50

40

30

20

10

0
yes No Yes No Yes No Yes No
Part of Banking Awareness Have you ever been a part Any Bank Representative Part of any illegal activity
Camp of financial planning visited your Bank charged from the Bank

Fig 5.1 Banking Services

Research Finding 1 - Very few people were the part of Banking awareness camp most of them
were unaware about banking awareness camp, very few of them were part of financial planning
and mostly people were unaware about financial planning, Most of the people says that any
bank representative haven’t visited their village and very few of them says that bank
representative visited their village, There are no such people on them bank have charged any
illegal activity.

32
 Table 5.2 Banking Operations:
Banking Operations Count Percentage %
Bank Account Yes 50 100.0%
No 0 0.0%
Type of Bank Account Savings 50 100.0%
Recurring Deposit 0 0.0%
Fixed Deposit 0 0.0%
Current Account 0 0.0%
Frequency of visiting to Bank Daily 0 0.0%
Weekly 0 0.0%
Monthly 2 4.0%
As & When Required 48 96.0%
Never 0 0.0%
Purpose of opening bank account Repay Old Loan 1 2.0%
To invest in Business 0 0.0%
Education 0 0.0%
Health benefits 1 2.0%
Assets Purchase 0 0.0%
Govt. Benefits 48 96.0%

50 50 48 48

0 0 0 1 0
NO

SAVINGS

NEVER
DAILY
YES

CURRENT ACCOUNT

WEEKLY

MONTHLY

GOVT. BENEFITS
REPAY OLD LOAN

EDUCATION
RECURRING DEPOSIT

TO INVEST IN BUSINESS

ASSETS PURCHASE
AS & WHEN REQUIRED
FIXED DEPOSIT

HEALTH BENEFITS

BANK TYPE OF BANK ACCOUNT FREQUENCY OF VISITING TO BANK PURPOSE OF OPENING BANK ACCOUNT
ACCOUNT

Fig 5.2 Banking Operations

33
Research Finding 2 – According to the Table All peoples have bank accounts, Everyone have
Savings account, Most of them visit the bank As and when required by them and very few of
them visit Monthly, most of them visit bank to withdraw the amount of Government benefit
and very few of them visit for other purposes.

34
 Table 5.3 Banking Awareness:
Financial Product Awareness Count Percentage % Usage %
Bank Account Awareness Yes 50 100.0% 100.00%
No 0.00%
0 0.0%
Bank Deposits Awareness Yes 20.00%
50 100.0%
No 80.00%
0 0.0%
Credit From Bank Awareness Yes 50.00%
46 92.0%
No 50.00%
4 8.0%
Credit Card/kcc Awareness Yes 40.00%
47 94.0%
No 60.00%
3 6.0%
Crop Insurance Awareness Yes 10.00%
48 96.0%
No 90.00%
2 4.0%
Debit Card Awareness Yes 20.00%
50 100.0%
No 80.00%
0 0.0%
Mobile/Internet Banking Awareness Yes 60.00%
50 100.0%
No 40.00%
0 0.0%
Remittance Awareness Yes 40.00%
32 64.0%
No 60.00%
18 36.0%
Mobile Wallet Awareness Yes 10.00%
50 100.0%
No 90.00%
0 0.0%

Finding 3 –Every Respondent is Aware about bank account, Everyone of them are aware about
bank deposits, Most of them are aware about credit from bank, Most of them are aware about
kcc, Mostly people are aware about crop insurance, All of them are aware about debit card, All
of them are aware about Internet banking, More than half of them are aware about remittance
and Every person is aware about Mobile wallet.

35
Table 5.4 Household affected by Distress Events:
Household affected by distress Percentage Coping Strategy
events Count % Formal Informal
Household affected by any distress Yes 44 88.0% 20 24
events No 6 12.0% 0 0
HH affected by Crop Failure Yes 3 6.0% 0 3
No 47 94.0% 0 0
HH affected by decline in productivity Yes 2 4.0% 0 2
of crops No 48 96.0% 0 0
HH affected by fall in market price Yes 10 20.0% 0 10
No 41 82.0% 0 0
HH affected by flood or disease Yes 25 50.0% 20 5
No 25 50.0% 0 0
HH affected by death of earning Yes 0 0.0% 0 0
member No 50 100.0% 0 0
HH affected by accident of earning Yes 4 8.0% 0 4
member No 46 92.0% 0 0
HH affected by Sudden job loss Yes 0 0.0% 0 0
No 50 100.0% 0 0
HH affected by Fire/Robbery/Theft Yes 0 0.0% 0 0
No 50 100.0% 0 0

Finding 4 - According to table 5.4 Most of the respondents are affected by the Flood or disease
few of them are not affected by flood, Some of the people are affected by crop failure, Some
of them are not affected by crop failure, most of the people are not affected by decline in
productivity of crops, most of them are not affected by fall in market price of crops, No one is
affected by job loss, Death of earning member and Robbery. As according to table Most of the
people used Formal strategy for Flood, and Informal strategy for fall in market price.

36
Table 5.5 Banking services Usage in last 3 Months:

Count Column N %
ATM used in last 3 months 0 18 36.0%
1 Time 20 40.0%
2 Times 10 20.0%
3 Times 2 4.0%
4 Times 0 0.0%
5 Times 0 0.0%
Mobile Banking used in last 3 months 0 40 80.0%
1 Time 10 20.0%
2 Times 0 0.0%
3 Times 0 0.0%
4 Times 0 0.0%
5 Times 0 0.0%
Internet Banking used in last 3 Months 0 2 4.0%
1 Time 23 46.0%
2 Times 19 38.0%
3 Times 5 10.0%
4 Times 1 2.0%
5 Times 0 0.0%
Transactions through cards like debit or kcc 0 1 2.0%
in last 3 months 1 Time 24 48.0%
2 Times 25 50.0%
3 Times 0 0.0%
4 Times 0 0.0%
5 Times 0 0.0%

COUNT
40

25
24
23
20

19
18

10

10

5
2

1
0

0
0

0
2 TIMES

3 TIMES

4 TIMES

5 TIMES

2 TIMES

3 TIMES

4 TIMES

5 TIMES

2 TIMES

3 TIMES

4 TIMES

5 TIMES

2 TIMES

3 TIMES

4 TIMES

5 TIMES
1 TIME

1 TIME

1 TIME

1 TIME

ATM USED IN LAST 3 MO B IL E BA NK ING USE D INTERNET BANKING TRA NSAC T IO NS

MO NT H S IN L AST 3 MO NT H S USED IN LAST 3 MONTHS TH RO UGH C ARDS L IKE
DEBIT OR KCC IN LAST 3
MONTHS

Fig 5.5 Banking services Usage in last 3 Months

37
Finding 5 – According to table 5.5, Mostly People used ATM 1 time in last 3 months very few
of them uses ATM 4 times in last 3 months, Most of the people used Mobile Banking 0 times
in last three months very few of them used mobile banking 1 or 2 times, Most of the people
used Internet banking 0 times in last three months some people used 1 time in last three months,
Half of the people do 2 time transaction through kcc in last 3 months and less than half of the
people done 1 time transaction.

38
Table 5.6 Insurance Coverage:
Insurance Coverage
Yes No Percentage(Yes) Percentage(No)

0 50 0.00% 100.00%

Finding 6 – According to table 5.6 It is concluded that there is no such respondent who have
taken any type of Insurance.

39
 Table 5.7 Source of Fund:

Source Of Fund

Saving Borrowing Sale of Assets

Only Highly Highly Only Only Highly Highly Only

Formal Formal Equal Informal Informal Formal Formal Equal Informal Informal Yes No

Count 0 0 0 0 0 5 9 0 4 11 0 50

Health Column% 0.00% 0.00% 0.00% 0.00% 0.00% 10.00% 18.00% 0.00% 8.00% 22% 0.00% 100.00%

Count 0 0 0 0 0 4 1 0 3 3 0 50

Education Column% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.00% 0.00% 6.00% 6% 0.00% 100.00%

Count 0 0 0 0 0 0 0 0 0 0 0 50
Income
Generation Column% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

Count 0 0 0 0 0 1 0 0 0 0 1 49
Assets
Ownership Column% 0.00% 0.00% 0.00% 0.00% 0.00% 2.00% 0.00% 0.00% 0.00% 0.00% 2.00% 98.00%

Count 0 0 0 0 0 0 0 0 0 0 0 0

Vulnerability Column% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Finding 7: From the above data it can be concluded that

Majority of the population arranging the fund through only informal sources

Some of them are arranging through Highly Formal Sources.

40
 Table 5.8 Reason for Not using Banking Services for loans:
Too
Loans Don't
Muc
h are not Bran Bank know Collatera Othe
pape as per ch is Emplo bank Time l r
r borrow Far yee operati Consum Require Speci
Wor ers Awa Behavi ons ing ment fy
k need y our
1 2 1 0 0
Health Count 10 0 1
0.00
Colum 20.00 2.00 2.00% 4.00% 2.00% 0.00% %
n% % 0.00% %
Educatio 0 0 0 2 0
n Count 4 0 0
0.00
Colum 8.00 0.00 0.00% 0.00% 0.00% 4.00% %
n% % 0.00% %
Income
Generati 0 0 0 0 0
on Count 0 0 0
0.00
Colum 0.00 0.00 0.00% 0.00% 0.00% 0.00% %
n% % 0.00% %
Asset
Ownershi 0 0 0 0 0
p Count 0 0 0
0.00
Colum 0.00 0.00 0.00% 0.00% 0.00% 0.00% %
n% % 0.00% %
Vulnerab 0 0 0 0 0
ility Count 0 0 0
0.00
Colum 0.00 0.00 0.00% 0.00% 0.00% 0.00% %
n% % 0.00% %

Finding 8:

As per the Above data it can be concluded that

A majority of the People said that there is too much of paper work in taking loans from the
formal source or the Bank.

Some people don’t know about banking operations

Very few said that Bank is far away, Bank Employee Behaviour is not good and Formal loan
is a time consuming process.

41
 PASS BOOK ANALYSIS

Name: Mr. Ram Kumar

Gender: Male

Duration: 10-02-2019 to 14-05-2021

Number of transaction: 54

Nature of transaction
Particular No. Amount (+) Amount(-)
Cash Deposit 0 0 0
Cash withdraw 19 39,800
Interest 10 43
Govt Benefits 25 44,917

50000
44917
45000
39800
40000
35000
30000
25000
20000
15000
10000
5000 0 43
0
1
Cash Deposit 0 0 0
Cash Withdraw 39800
Interest 43
Govt. Benefits 44917

42
 Transactions
Amount Credited(+) Amount Debited(-)
Date
01/02/2019 1500

11/03/2019 -1500

18/03/2019 2000

21/03/2019 -2000

09/04/2019 2000

10/04/2019 -2000

30/07/2019 1500

31/07/2019 -1500

05/08/2019 6000

08/08/2019 -6000

04/10/2019 6000

05/10/2019 -6000

17/10/2019 2000

23/10/2019 -2000

25/10/2019 1500

26/10/2019 -1500

17/01/2020 1500

22/01/2020 -1500

07/03/2020 2000

16/03/2020 -2000

19/03/2020 1500

43
04/04/2020 1000

11/04/2020 2000

14/04/2020 -4500

04/06/2020 1000

14/06/2020 500

18/06/2020 -1500

07/07/2020 561

07/08/2020 -500

11/08/2020 2000

14/08/2020 -2000

16/09/2020 1500

25/09/2020 -1600

25/12/2020 2000

28/12/2020 -2000

28/12/2020 1500

18/01/2021 -1500

03/03/2021 355

23/03/2021 1500

23/04/2021 923

01/05/2021 243

07/05/2021 685

13/05/2021 -2000

14/05/2021 2000

44
Graph of Transaction

 Amount Credited
 Amount Debited

45
Name: Mrs. Nikita

Gender: Female

Duration: 01-10-2019 to 27-01-2021

Number of transaction: 24
Economic Status: BPL
Particular No. Amount (+) Amount(-)
Cash Deposit 0 0
Cash withdraw 8 8024
Interest 6 24
Govt Benefits 10 10184

Govt Benefits

Interest

Cash withdraw

Cash Deposit

0 2000 4000 6000 8000 10000 12000

Amount(-) Amount (+)

46
 Transactions
Credited Amount(+) Debited Amount(-)
Date
01/10/2019 100

28/10/2019 1092

25/11/2019 -1000

28/11/2019 1092

09/12/2019 -1000

13/12/2019 1000

28/01/2020 2000

17/02/2020 -3000

04/04/2020 500

24/04/2020 1400

30/04/2020 -1500

05/05/2020 500

18/05/2020 -1000

06/06/2020 500

10/06/2020 -500

11/03/2021 2000

47
Graph of Transactions

 Amount Credited
 Amount Debited

48
LIMITATIONS,
SUGGESTIONS
AND
CONCLUSION

49
 Limitations

• Education level and awareness level is less so people prefer informal lending.
• Majority of poor household gets loans from Informal sector.
• Informal sector works on highly interest chargeable because many people not
familiar with banks but they comfortable with friends, relatives recognition, and
reputation.
• Required no documentation and ease for individual for lending loans.
• There is no such organization to surprise the lending activities of such resources.

50
 Suggestions

 Ease the paper work in formal credit availability of loan.

 Providing more personal loan.
 Reduce the paper work and other time consuming.
 Develop the trust in the formal credit system.

51
 Conclusion

To characterize equilibrium commitment contracts for hyperbolic discounters under different

banking environments. This suggests several areas for continued research.

There is room for analyzing in greater detail the role of external interest rates. As interest rates
rise, lending clearly becomes less attractive since there are non-commitment motives to save.
However, the relative appeal of lending over saving will still be greater for more time-
inconsistent agents. There also remains a potentially interesting question of how these results
would change under an infinite horizon. Such an analysis would introduce the possibility of
multiple equilibrium. Here, a banks contract will depend not just on the agents type but on
his choice of autarky equilibrium. Finally, this paper makes the assumption that contracts, once
signed, are exclusive and cannot be renegotiated. While this is plausible with a monopolist or
an NGO, it is harder to justify under competition, when banks could offer agents secondary
loans that undermine the benefits of commitment. This is the subject of continuing work.

While the model presented above is a stylized representation of markets for commitment
savings and loans, the goal of the paper has been to articulate the sometimes subtle mechanics
at work in the interaction between hyperbolic discounters and informal banks.

52
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53
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55
Annexure

56
 QUESTIONNAIRE
S. No……….. DATE - …………………………

NAME - ……………………………………………. Village Name - …………………………………….

Section A

1. Gender of Family head who takes financial decision….. a). Male b). Female
2. Age Of family head…………………
3. Marital status of family head : a). Married b). Unmarried c). Other specify
4. Education of family head. a). Illiterate b). Primary c). Metric d). Intermediate e).
Graduation f). PG
5. Religion. A). Hindu b). Muslim c). Sikh d). Christian e). Other Specify
6. Category. A). General b). OBC c). SC d). ST
7. Occupation. A). Farmer b). Tenant Cultivation c). Agricultural labour d). Construction
labour e). Govt/pvt employee f). Self employed g). Others.
8. What are the ways of a). Savings……………………….
b). Borrowings…………………………
9. Economic Status. A). BPL b). APL.
10. Do You have access to any financial service or scheme of Govt.
11. Total HH income(Annual INR)………………………..
12. Do you have land. A). Yes b). No
13. Land Size……………
14. A). Personal b). On Lease
15. a). Cultivated b). Uncultivated
16. Total Family Size(Number)…………………………. Dependent…………... Independent……………..

19. Have you benefitted by any govt. scheme. A). Yes b). No

57
 Banking facilities

Banking Cheque Payment Money ATM

facilities Book transfer

Awareness

Usage

26. If your response is No, Why?

a) Don’t have enough money b) Lack of awareness c) Employers behaviour d) Branch is far
away

e) Time consuming f) Don’t know banking operations g) Others……………………..

27. Have you ever applied for a loan?

a) Yes b) No

58
28. If Yes:

a) Purpose:

b) Sanctioned/ No sanctioned:

c) Repayment status:

d) Mortgage amount:

29. If No, Why didn’t you apply?

30. Do you use KCC ?

a) Yes b) No

31. If Yes, for what purpose do you use?

a) Agricultural purpose b) Repayment of the loan c) Meeting out emergencies d) Family

requirements

e) Other……………………….

32.

59
33. Please tell us about your status with reference to the Are you If ‘Yes’ in 1, If ‘no’ or
following financial Products aware of does any ‘don’t
this member of know’ in 2,
product? your then tell us
(Yes – 1; household that in the
No-2) currently last 3 years,
hold this has any
product member of
(Personally your
or Jointly)? household
(Yes – 1;No chosen any
– 2;Can’t of the
Say/Don’t following
know – 3) products.
(Yes – 1; No
– 2;Don’t
know/Can’t
Say – 3)

A). Bank Account

B). Bank Deposits like FD, RD, etc.

C). Credit/loan from a Bank

D). Credit Card/ Kissan Credit Card

E). Crop Insurance

F). Other Insurance

G). Debit Card

H). Mobile/Internet Banking

I). Remittance (NEFT/RTGS/IMPS/UPI, etc.)

J). Mobile Wallet( Paytm /Free Charge/

M Paisa, etc.)

K). Any Others

34. Loan and borrowings

a) Does the household have any outstanding debt as on date?

(Yes/ No )

60
 b) If yes, then what is the total amount of understanding loan on the household as on date?

c) Has any member of the household taken any loan in the past one year preceding the survey

35. Insurance Coverage

a) Is any member of the household having any insurance scheme?

Name Type of Name of Premium Annual Did the If, yes If code If code
of the insurance insurance payment premium member did you ‘1’ or ‘2’ ‘3’ in
member (code) scheme (self - paid ( in make any receive in column
contribution rupees) claim under claim column G, then
-1, the insurance amount G, Claim reasons
Subsidized- schemes in in amount for not
2) the last one time? received? receiving
year?(yes/No) ( In claim^
rupees ) (code)

36. Risk and Uncertainties :

Was your household affected by any of the following distress events/emergencies in the last
10 years preceding the survey?

A). Yes B). No

If Yes, then what strategies did you adopt to cope with the event?

Events Whether household was If Yes, Which Coping

affected? (Yes – 1, No–2) strategies did you adopt?

36.1 Crop Failure due to

excessive Rainfall, very

61
 low rainfall, or
unseasonal rainfall

36.2 Sudden decline in

productivity of crops
due to pest infestation,
etc.

36.3 Sudden fall in the

market price of crops.

36.4 Loss of livestock due to

flood, disease, etc.

36.5 Death of the earning

member of the
household.

36.6 Sudden health

problem/Accident.

36.7 Sudden job loss

36.8 Fire/Robbery/Theft

36.9 Any Other (Specify)…..

37. Experience of Availing a Financial Service :

37.1 How Many times did you visit the

Bank or financial institution to
avail any services in the last three
months?(Excluding ATM)

37.2 With reference to your last visit

to a bank or financial institution ,
Please tell us that how many time

62
 did you have to visit to get the
work completed.

37.3 Service Availed

Number
of visits
to
complete
the work

37.4 Saving Bank account related

operations

37.5 Loan related operations

37.6 Investment related operations

37.7 How many times did you use the following banking facilities it in the last 3 months
and express your level of comfort in using these facilities?

Types of Banking Facility How many times Indicate your level

did you use this of comfort with
service in the last 3 using this service
Months?

37.7.1 ATMs (ATMs/Micro ATMs)

37.7.2 Mobile Banking

37.7.3 Internet Banking

37.7.4 Transactions through cards like

debit/credit or kisan credit card

63
37.8 How many times did you use the following banking facilities it in the last 3 months
and express your level of comfort in using these facilities?

Indicate extend of
effectiveness(extremely
effective – 1;
Somewhat effective-
2;Neutral-3;Not so
Payment Mechanism No. of Times used effective-4;Not at all
in last 3 Months effective-5)

37.8.1 By Cheque

37.8.2 By Debit/Credit Card

37.8.3 Through Net Banking

37.8.4 Mobile Payments

37.8.5 Money Orders through Post

Offices

38. Loan Seeking Behaviour and preferences :

38.1 Did you ever need a loan in the last 3 years?

1). Yes 2). No

38.1.1 How much Money did you need to

borrow

38.1.2 Which of the following statement Applied for loan and got it. – 1
applies to you.
Applied for loan and didn’t got it. – 2

Didn’t applied for loan. – 3

64
 39. Reason for not availing banking sources for loan :

a) Lots of Paper work

b) Had to give collateral security
c) Didn’t applied because was denied credit earlier
d) Economic situation was not good so bank denied to provide loan.
e) Any Other………………………………

40. Reason for availing Informal banking :

a) Easy Availability
b) No strict time for repayment
c) Loan available for all purposes
d) Low or no rate of interest
e) Faith on family and friends
f) No paper work needed.
g) Any Other………………….

41. Sources and mortgages needed for informal loans :

a) On jewelry as mortgage
b) On Papers of Home or land
c) From Village Representative or Chairperson(Pradhan)
d) From Family and Friends.

65
Project Guide Comments

66
THANK YOU

67