9.Copy of Economics - IJECR - Financial Services - Challa Radhakumari - OPaid (1)

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FINANCIAL SERVICES FOR BANKLESS VILLAGES – A FACET OF FINANCIAL

INCLUSION: THE SUCCEEDING TALE IN ANDHRA PRADESH AND KARNATAKA

CHALLA RADHAKUMARI1 & M. R. GEETHA BALA2

1Associate Professor, Dept. of Management and Commerce, SSSIHL, Anantapur, Andhra Pradesh, India

2Assistant Professor, Dept.of Economics, SSSIHL, Anantapur, Andhra Pradesh, India

ABSTRACT

The level of banking exclusion varies across the countries and the world. For improving the access of banking

services to the hitherto unbanked rural areas, Financial Inclusion (FI) has been identified as an instrument. For the purpose

of the present study State Bank of India and the villages under its jurisdiction in the States of Andhra Pradesh and

Karnataka are identified. The study primarily aims at understanding whether the present route of implementation of FI ismatching with the expected direction of the RBI.

Two villages as one each from both the States with 60 respondents from each village are selected on the basis of

systematic sampling. The primary data obtained on the basis of the questionnaires made, constituted the basis for

interpretation and drawing conclusions. The study highlights that implementation of the policy of FI is proceeding in the

required direction as laid down by the policy makers. In general the villagers expressed tremendous fulfillment over the

efforts for taking the banking services to their villages. The study further underlines that the bank adopts two different

techniques in both the States, as “Kiosk Banking” in Andhra Pradesh and ‘Mobile Banking” in Karnataka for

implementing the FI.

KEYWORDS: Financial Inclusion, Kiosk Banking, Mobile Banking, Unbanked Areas, No-Frill Accounts

INTRODUCTION

Financial Inclusion broadly refers to the delivery of banking and other financial services to the people in rural

villages who have had no access to these services as they are not available in the villages. This concept is also termed as

Financial Exclusion. The level of banking exclusion varies across the countries and the world. However, it is the same

group of people everywhere who are affected by this Financial Exclusion. People who have low income or no source of

regular income, who lack capabilities that can be converted into labour and who have the history of bad debts and so on,

are excluded from availing the financial services.

In the light of the generally accepted belief that improving access to various financial services in the hitherto

neglected rural villages would contribute to bridging the rural-urban divide, Financial Inclusion (FI) has become the time-

honored instrument. Keeping in pursuance of the directions of RBI, all the Commercial and other banks have taken up the

task of working towards Financial Inclusion.

REVIEW OF LITERATURE

In 2007-08 the Government had set up two Funds i.e., Financial Inclusion Fund (FIF) and Financial Inclusion

Technology Fund (FITF) with a corpus of Rs. 500 crore each under NABARD. The purpose was to extend banking

services to the unbanked areas. In the budget of 2009-10 the Government has further contributed rupees 100 crore to each

of these funds in order to strengthen the pace of development of FI. The contributors to these funds are Government of

India, RBI and NABARD.

International Journal of Economics, Commerce

and Research (IJECR)

ISSN 2250-0006

Vol. 3, Issue 1, Mar 2013, 63-78

© TJPRC Pvt. Ltd.



64 Challa Radhakumari & M. R. Geetha Bala

The Finance Ministry also introduced FI index from June, 2010 onwards in order to assess the progress of FI at

the end of every quarter and in various regions of the country. The roadmap for expanding the penetration of banking

activities in unbanked and under-banked areas was created with the help of FI Index. In the year 2010-11 the Ministry had

also identified two criteria to judge the performance of CEOs of public sector banks. The two criteria adopted are numberof additional branches covered and the new no-frill accounts opened.

But till now no systematic studies have been made to assess the progress of FI, the degree of its penetration in the

villages; and its impact on the lives of customers. Therefore the present study would be one among the first few scientific

studies conducted in the direction of assessing the progress of FI and its impact on the lives of the customers in the

villages. This would constitute the source for further research of this kind in the area of FI.

NEED AND SIGNIFICANCE OF THE STUDY

Banking/financial services are in the nature of public goods. Every citizen of India has the right to have access to

these goods. The open and efficient society stresses on the need that there should be unrestrained access of all the public

goods and services to all the citizens of the country. The main objective of the present FI policy is to make available the

banking, financial and other payment services to the entire population of the country without any discrimination.

Hence, consistent efforts are being made to examine the causes of financial exclusion; and the strategies adopted

to ensure FI of the poor and underprivileged, at national and international level. As the reasons for financial exclusion vary

from country to country, the strategies for plugging the holes of financial exclusion also differ. However both the

developed and developing countries are making serious efforts for FI in order to bring about the balanced economic

growth. In this context, under the directions of the RBI, India too has initiated the process of implementing the strategies

for bringing about total FI in the country.

The concept of FI has made the first move to deliver the banking and other financial services at an affordable cost

to vast sections of the disadvantaged and low income groups in the villages. FI has been initiated in almost all the States of

India. The Commercial banks in India have launched these services under the name “CITIZEN SERVICE POINT” (CSP)

in all the villages having more than 2000 population, as a first phase. We have almost touched the deadline of 2012 set for

achieving the cent percent FI in the country. Unless simultaneous efforts are made to analyse scientifically whether the

efforts being made are taking us in the required direction, we cannot avoid the danger of total deviation from the required

track.

Under the above backdrop, the present research study is an attempt to make an analysis of, how far the set

objective of FI has been achieved in the direction of providing financial services in the villages and their utilization by the

rural communities.

OBJECTIVES OF THE STUDY

The present research work is undertaken with the following two categories of objectives:

Primary Objective: To understand whether the present route of implementation of Financial Inclusion is matching

with the expected direction of the policy makers.

Secondary objectives:

1) To judge whether opening the no-frill accounts has helped the customers in avoiding accessing the informal

sources of financing in the villages. If not, to highlight the reasons for the villagers to continue to depend on the

informal sources of financing.



Financial Services for Bankless Villages – A Facet of Financial Inclusion: 65The Succeeding Tale in Andhra Pradesh and Karnataka

2) To understand the reasons for opening the no-frills saving bank Accounts;

3) To highlight whether there is any relation between age and awareness about the financial services launched in the

villages among the customers/users in the villages.

4) To identify whether the level of education among the customers has any relation with the:

a) Awareness about the financial services launched among the villagers; and the method of functioning of

the same, in the villages.

b) Saving habit among the customers.

c) Their capacity to put signature to authenticate their transactions,

d) Their attitude to motivate others to enjoy the benefit of opening the no-frill accounts.

5) To bring to light whether there is any relation between awareness among the customers about the financial

services offered in the villages and their approaching informal sources.

6) Finally, to collect suggestions from the customers for improving the functional efficiency of the policy of FI.

METHODOLOGY AND STATISTICAL TOOLS APPLIED

All the Commercial banks are equally vigorously involved in implementing the scheme of FI. For the purpose of

the present study, State Bank of India, which is the lead bank in initiating and implementing the scheme and the villages

under its jurisdiction, are identified. Two villages as one each from both the States of Andhra Pradesh and Karnataka,

which are comparable on all fronts and where the financial services are being provided as part of the policy of FI, are

selected at random. Accordingly, ‘Kallumadi’ in the district of Anantapur in the State of Andhra Pradesh and

‘Sasanakunte’ in the district of Tumkur in Karnataka are chosen for the study. From the villages thus selected, 60

customers each are further identified on the basis of systematic sampling. This makes the total sample of the size of 120.

A preliminary survey was conducted by the authors in one of the villages in Andhra Pradesh under SBI

jurisdiction to understand the method of functioning of the Customer Service Point (CSP) from the point of view of

Business Correspondents (BC) and the customers / users. Based on the knowledge gained from the pilot study a detailed

questionnaire was developed for collecting the information from the customers of CSP in both the States. The primary data

thus obtained was classified, analyzed and tested for the inter-dependency of various factors using one of the most popular

statistical techniques known as the Chi-square test. This test was applied for the null hypotheses (Ho) where Ho is framed

with the assumption that the attributes under consideration are not dependent on each other. The results were then

interpreted and the conclusions were drawn as follows. If the Chi-square calculated value is less than the table value, Ho is

accepted, otherwise Ho is rejected. The percentages and graphical presentation of the results were also used where

necessary.

HYPOTHESES

For assessing the experiences of villagers with respect to the utilization of financial services offered by the banks

in the villages, the following hypotheses were set:

1) Ho: Opening the no-frill accounts as part of the FI measure has not helped the villagers in reducing their

dependence on informal sources of financing.

2) Ho: Age of the customers who opened the no-frill accounts and the awareness of customers about the financial

services provided in the villages are not related to each other.

3) Ho: The level of education among the customers ( users) of these facilities has no relation with:




Awareness about the financial services launched and the method of functioning of the same among

the villagers.

The saving habit among the villagers.

Capacity to put signature to authenticate the transactions

Attitude to motivate others about the services

4) Ho: There is no relation between awareness among the villagers about the financial services offered and the need

for approaching the informal sources for meeting their financial requirements.

RESULTS AND DISCUSSIONS OF THE STUDY

The results of the study are discussed under four groups as:

Implementation of FI in both the States.

Experiences of the customers with financial services offered through Business Correspondents (BC) in the

selected villages from both the States.

Critical Success Factors.

Suggestions from BCs and customers for improving the functional efficiency of CSPs for realizing the final

objective of FI.

Implementation of FI in the Two States

All the Commercial Banks are seriously involved in the implementation of the policy of FI in both the States, as

directed by the RBI. To avoid overlapping of the work relating to the initiation of Customers Service Points (CSP) in

different villages, each Commercial Bank is allotted a specific number of villages which would fall under their jurisdiction,

making that bank responsible for achieving the cent percent FI in those villages. While the mode of operation of the CSP

differs from bank to bank; and from State to State, the center point of operation remains to be the “Business Correspondent

(BC)- CSP model” for all the banks.

In the State of Andhra Pradesh, a youth within the age group of 25 to 35 years, belonging to the same village,

having minimum knowledge of the required technology employed by the banks, is selected as the BC. BCs thus selected

are trained, encouraged and assured of all the needed support for starting the CSPs in their villages. In the district of

Anantapur, BCs themselves are working as CSPs in all the villages. Following the technique of “Kiosk Banking”, the State

Bank of India in Andhra Pradesh is offering the financial services to villagers through the selected individual BCs. In the

State of Karnataka, institutions are appointed as BCs who in turn have district supervisors to oversee the functioning of

CSPs in each village under their jurisdiction. Institutions such as ZMF, OXIZEN, SKDRDP are working as BCs for the

State of Karnataka. Each institution working as BC for the bank is allotted certain number of villages for starting the CSPs.

Following the technique of “Mobile Banking”, these BC are suppo rting the financial services offered by the CSPs to the

villagers.

For the present in both the States, no-frill accounts opened are being used for depositing, withdrawing, fund

transferring, and online withdrawal. (from BC points alone) It is likely that these no-frill accounts will also be used for

crediting the old age pensions, crop subsidies, sanctioned loans and such other benefits, in near future. Efforts are also

being made by the bank to create awareness among all the villagers in its allotted villages, about the procedure to be

followed for opening the no-frill accounts and making use of the services offered at the Kiosk. The list of do’ s and don’ ts

for customers for making use of the services is displayed at every CSP in the villages in Andhra Pradesh. Along with the

above, a list of banking products and services available at the CSP is also displayed.




Experiences of the Customers with Financial Services Offered through the CSP by the Business

Correspondents (BC)

Variables such as age, level of education, awareness about the CSP and various services offered at the CSP,

saving habit, capacity to put signature, ability to motivate others in the village about the use of the services offered,

dependence on informal sources of financing such as money lenders, friends etc. were chosen for analyzing their

interrelationship to understand various aspects relating to the launching of banking services in the villages. The results are

discussed as under:

The study reveals that opening no-frill accounts in the villages as part of the policy of FI, has helped the

customers in reducing accessing the informal sources to meet their financial needs, in both the States. (Table-1;

Fig – 1; Annexure-I). This proves that making villagers open the no-frill accounts is giving them the confidence

that the required financial services would be offered to them by the banks when they need; and hence dependence

of customers on informal sources of finances in villages is noticed decreasing.

Figure 1: Relation between Opening the No-Frills Account and Dependence on Informal Sources of Finance

Interaction with the customers brought to focus that almost 80% of the customers in both the States opened the

no-frill accounts with the idea of putting in some amount for future use. While as high as 33% of them opened the

accounts for various other reasons such as depositing money to give education to children or meet other family

requirements such as children’s marriages or construction of a small house etc.; in Karnataka, a mere 18% of themopened accounts for this purpose. Another 18% percentage of them said that the account could be used for reasons

like receiving scholarship for children or government subsidy or old age pension etc, 10% of the customers

reiterated that they would like to use this account to take loans from the bank to avoid borrowing from local

money lenders in Andhra Pradesh while this percentage is negligible in Karnataka. The least of 6.67% of them in

Andhra Pradesh said that they opened the accounts to pay loan installments on their borrowings from banks.

(Table 2; Fig 2; Annexure-I). This indicates that even villagers are conscious of the need of finances for future

use. Because of the unavailability of the facility in villages, it is observed that the villagers lack motivation to save

money. If this factor is given due consideration, it will result in dual benefit as services availability in the villages

and improvement in the business growth of banks.




Figure 2: Reasons for Opening the No-Frill Accounts in both the States

Analysis of the relation between age of the customers and their awareness about the banking services offered in

the villages reveals that the two attributes are independent. (Table 3; Fig 3; Annexure-I) For getting to know about

any new service launched in the villages, it is the interest in the human beings that matters and not the age factor,

as proved by the study.

Figure 3: Relation between Age and Awareness about the Services at BC Point

Rejection of Ho for assessing the relation between the level of education among the customers one hand; and their

awareness about the financial services offered in the village; their saving habits, their capacity to put the signature,

and their attitude to motivate others to use the given financial services on the other, reveals that the level of

education is dependent on all these variables. This implies that higher the level of education, greater is the

awareness among the customers. It appears that the educated are more eager to know about the new facilities that

come to their village than uneducated. Educated seem to develop zeal to save money even if it is in small

amounts; and if convinced, are ready to motivate and convince others about the facilities they are aware off.

(Tables-4,5,6,7; Annexure-I; Fig 4: ) This made the authors understand that it is very easy to get the cooperation

from the villagers for implementing any scheme. We can make villagers understand any philosophy through mere

creation of awareness. The situation is same in both the States.




Figure 4: Relation between the Level of Education and Capacity to Sign

Table-8 in Annexure-I, Fig 8, indicates that customers awareness about the banking services available in the

villages is not related to their dependence on the informal sources of financing. Until the tangible benefits of

informal sources supersede the existing formal financial services in the villages, their dependence on informal

sources of financing will continue to exist, in every village in each State.

Figure 5: Relation between Awareness and Approaching Informal Sources

Overall impact of launching banking services in the unbanked villages:

While all the customers/users in both the States in unison understand and agree that the banking services launched

in their villages are definitely useful to them, but the users of the services are still not able to assess in concrete terms

whether these services have improved their present income level, saving level, children’s education, helped in using the no-

frill account to repay their loans and has got them the financial freedom that would result in the betterment of their general

standard of living and their overall status in the society.

Critical Success Factors

These factors represent the most important parameters that contributed to the successful launching of banking

services in the unbanked areas of the villages in both the States, for bringing about cent percent Financial Inclusion.




BCs being one among the villagers in Andhra Pradesh

This constituted the most critical factor for the success of the CSP in the villages of Andhra Pradesh. As the

selected Business Correspondents belong to the same village, they are able to gain quick response from the

villagers. If an outsider was brought into the village for the same purpose, whether similar results in the form of

response from the villagers could be achieved or not, is the question to be answered only after experimentation.

Confidence of Villagers in the selected BC:

During the investigation it was noticed that many villagers in these villages, opened the no-frill accounts because

of their trust and confidence in the BC rather than their understanding of the services offered. It is also noticed

during the study that majority of the villagers are not even aware that the CSP functioning in the village is a unit

of the State Bank of India.

Zeal and Enthusiasm of the BCs:

It was further observed that the BCs in the selected villages are highly self-motivated and service-oriented

individuals. Interaction with them revealed that their sole aim is to render as much service as possible to their

villagers for which they are ready to undergo any kind of trouble or face any problems what so ever.

Public Relation Maintenance Capacity of the BCs:

The capacity of the BCs in creating awareness and understanding among the villagers about the financial services

launched and their future benefit to the villagers, is going a long way in motivating the villagers to participate in

the Financial Inclusion plans of the RBI.

Villager’s difficulties with the main banks:

Some villager’s have already experienced the difficulties involved in opening an account in the bank; getting loan

sanctioned and release of the same; getting government subsidies released; getting the granted scholarships

credited to their accounts, getting drats made, transferring funds and so on. In most of the villages getting any

work related to the bank meant loss of one or two working days. This understanding has made many elderly

villagers quickly respond to the CSP services.

Mobile Banking Technology in the State of Karnataka has wiped off the network connectivity problems that the

Kiosk Banking technology is facing in Andhra Pradesh.

Individual BC model of Andhra Pradesh is generating quick results to the villagers leading to speedy FI as against

institutional BC model of Karnataka.Suggestions

The suggestions offered by the Business Correspondents and the customers for improving the performance

efficiency of the FI policy, are gathered from both the States; and presented below:

a) Suggestions from the BCs

Helping the BCs in solving the severe network connectivity problems faced by them.

Giving BCs the solution to “what to do next”?. Many BCs are unable to understand what is to be done next, after

opening the no-frill accounts for all the villagers in their alloted villages, which meant stagnation to their income.

Showing a continuous source of income to BCs by leveraging their services to empower the villagers on one

hand; and to fulfill the purpose of setting up of CSPs on the other, by adding more banking products and services

to the CSPs through BCs.




Based on the performance of the work assigned, a certain percentage of commission on each transaction relating

to every added banking product and service can be given to each BC to assure continuity to their income.

In some villages, recognition to these banking services is forth coming only because of the confidence of villagers

in the good attitude of BCs. To support BCs and to make villagers understand that the CSPs are the direct units of

the State Bank of India, frequent visits of the concerned bank officers to the villages is a must, which is missing

right now.

To achieve the dual goal of empowerment of villagers and the viable functioning of the CSPs, CSPs can be used

for providing more banking products and services. Helping villagers engage in income-generating activities more

financial support needs to be given through CSPs, which in turn assures the support for CSPs workable

functioning. This would increase the transaction rate of the CSPs besides enabling villagers in getting more

banking services to their door step which would empower their lives.

Allotment of a toll free number to clarify the doubts of BCs and for resolving the grievances of the customers.

b) Suggestions from Customers

Replacement of the present Voucher receipt for each transaction with the issue of regular passbook.

Issue of ATM cards at least to those no-frill account holders who fulfill the basic requirement for the same.

The money that the villagers get under the village employment guarantee scheme presently through the post

offices be routed through the CSPs accounts in the villages.

Provision should be made for recovering the SHGs loans through these accounts which is not done at present.

SHG members have to visit the bank branches for repaying their loans involving cost, time and other

inconveniences. All the utility bill payments also may be accepted through these accounts to avoid any scope of manipulations

involved in direct cash collections by the concerned clerks. (Electricity bill payments are collected directly in

cash)

Right now the old age pensions are being disbursed to them in the form of cash by the village secretary. For any

reason if any person is not available at the time of distribution he/she will not get back the amount. If this amount

could be credited to these CSP accounts, all the hassles of the pensioners can be put an end to.

CSP accounts may also be considered for banking products like sanctioning of small loans and their

disbursements.

Right now provision for opening of joint account is not there at the CSP. At least if a provision is made to open a

joint account with a minor child, scholarships can be received to these accounts.

Under the ICDS (Integrated Children’s Development Society) Female children receive money at the rate of `

5,000 per head. If this amount could be credited to these CSP joint account of parents with the child, many

problems associated with direct cash receipt and payment can be avoided.

More efforts may be made to increase the confidence of the workers on the stability of the CSPs; and that the

CSPs are part of the main Bank’s business. Assurance has to be given to the customers in the villages that

whatever banking transaction takes place at CSP, it will simultaneously be done in the main bank and that it

amounts to the villagers transacting directly with the bank. It is also suggested that loans may be given to the unemployed youth in the villages through the CSPs without any

present security but based on their prospective income.




Loans may be sanctioned based on the security of some certificates like NSCs or FDs or balances in the RD

accounts through the CSPs.

CONCLUSIONS

The study highlights that implementation of the policy towards achieving the cent percent Financial Inclusion is

proceeding in the required direction as laid down by the policy makers. In general the villagers expressed tremendous

fulfillment over the governmental efforts for taking the banking and other financial services to their villages for bettering

their lives. The customers of Andhra Pradesh expressed total satisfaction over employing one among them as the Business

Correspondent for operating the CSPs.

The study further reiterated that the villagers in both the States are responding to the banking services offered in

their villages due to their trust and faith in the BCs rather than based on their awareness about what is being done by the

banks. This necessitates more efforts on the part of the banks in making frequent visits to the CSPs and assuring the

villagers that the CSPs are part and parcel of their overall banking business. Finally the villagers desired for converting the

CSPs into mini banks for getting all the banking products and services to the villages itself.

FURTHER SCOPE OF THE STUDY

The present study marks the very beginning stage in the scientific analysis of the impact of implementation of the

policy of FI. In this paper the effectiveness of the Financial Inclusion programme launched by SBI has been studied by

considering a sample of 120, constituting 60 users from two districts spread across both the States.

The study can be further extended to the other villages under the same bank’s jurisdiction or villages where other

nationalized banks are involved, so as to have a more detailed analysis.

In addition, we can also consider the practical difficulties faced by the BCs who are directly involved in the

implementation of the scheme of Financial Inclusion in the villages, by taking them as sample units. Besides, the critical

comparison of the technologies adopted by different banks in providing this facility can also be done on similar lines from

supply side.

ACKNOWLEDGEMENTS

The authors submit this work at the Lotus Feet of Bhagawan Sri Sathya Sai Baba whose invisible blessings and

grace guided them in all their endeavours.

The authors express their deep sense of gratitude to the Regional Manager, SBI, Smt. Ratna Kumari, and her team

members involved in the implementation of Financial Inclusion Policy in Anantapur District, and to Shri Pattabhi, incharge

of FI in the head office of the SBI, Karnataka; for encouraging us to take up this project with an assurance of supplying the

required data along with other necessary support.

Our deep gratitude is also due to Sri B. Narayana Swamy, Chief Councillor, FLCC – (Financial Literacy and

Credit Councilling), Anantapur, for sparing his valuable time to educate the authors about the functioning of the policy of

Financial Inclusion in the District of Anantapur besides giving us the necessary secondary data.

Special thanks are due to Sri. Prof. K.L.A.P Sharma, Department of Statistics, Sri Krishna Devaraya University,

Anantapur, for his excellent guidance in the selection and application of statitistical techniques relating to all our research

work.




REFERENCES

1. Kempson E, A. Atkinson and O. Pilley. 2004. “Policy Level Response to Financial Exclusion in Developed

Economies: Lessons for Developing Countries.” University of Bristol.

2. Buckland, J., and B. Guenther (2005): 'There Are No Banks Here, Financial and Insurance Exclusion in Winnipeg’

North End', Social Sciences and Humanities Research Council of Canada (September).

3. Kempson, E. 2006. Policy Level Response to Financial Exclusion in Developed Economies: Lessons for

Developing Countries, Paper for Access to Finance: Building Inclusive Financial Systems, World Bank,

Washington, May.

4. Kamath, Raghav. 2007, “ Branchless Banking: Corp Bank’s Answer for Financial Inclusion” CAB Calling July-

September; Vol. 31, No. 3.

5.

Rajan, M.S.S. 2007. Replication of Financial Inclusion: Oppor tunities and Challenges –

Indian Bank Experience;CAB Calling July-September, Vol.31, No.3.

6. Indian Bank Website, www.indianbank.in

7. Bank of Scotland. 2007. Delivering our Financial Inclusion Agenda in Scotland, March.

8. H.M. Treasury. 2007. Financial Inclusion: the Way Forward, HM Treasury, UK, March.

9. Asian Development Bank. 2007. “Low Income Households’ Access to Financial Services – International

Experience, Measures for Improvement, and the Future.” EARD Special Studies, October.

10. Jha, B.K. 2008, ‘Role of Banking Services in Rural Entrepreneurship (A case study of Sultanpur District,U.P.)’

published in ‘Banking Finance’.

11. Government of India. 2008. Report of the Committee on Financial Inclusion in India (Chairman Dr. C.

Rangarajan),January.

12. World Bank. 2008. Finance for All – Policy and Pitfalls in Expanding Access. The World Bank, Washington, D.C.

13. Reserve Bank of India Report on Financial Inclusion – 4th

September 2008.

14. Barik B.B. 2009, “Financial Inclusion and Empowerment of Indian Rural Households”.

APPENDICESAPPENDICES I – Statistical Tables:

Table 1: Relation between Opening the No-Frills Accounts and Dependence on Informal Sources among Customers

Opening

Account and

Awareness

Dependence on Informal Sources of

Financing

Andhra Pradesh Karnataka

Yes Yes Total

Yes 27 47 74

No 5 13 18

Total 32 60 92χ2 = 6.7809 Ho – rejected

http://www.indianbank.in/






Table 2: Reasons for Opening the No-Frill Accounts by the Customers

Andhra Pradesh Karnataka

Reasons Number Percentage Number Percentage

To save for future 48/60 80 47/60 78

To pay loan installments 4/60 6.67 2/60 3

To be free from taking loans from money-lenders 6/60 10 1/60 2

To give education to children/meet other family needs 11/60 18 1/60 2

Any other reasons include to receive scholarship, to

avoid travelling long distances, to use anytime

available facility in the village etc.

11/60 18 20/60 33

Table 3: Relation Age and Awareness about the Services at BC Point

Age Users/Customers

In Years Andhra Pradesh Karnataka Total

18 -20 5 6 11

21-35 22 24 46

36-50 16 13 29

Above 50 5 7 12

Total 48 50 98χ2 = 0.973 Ho – accepted

Table 4: Relation between Level of Education and Awareness about the CSP

Level of EducationAndhra

PradeshKarnataka

Yes No Yes NoNIL 22 3 11 3

Below 10th

24 3 18 2

Between 10th and P.G 7 1 25 1

Total 53 7 54 6χ2 = 22.36 Ho -- rejected

Table 5: Relation between Level of Education and Saving Habit

Level of Education Andhra Pradesh Karnataka

Yes No Yes No

NIL 20 6 6 9Below 10th 19 6 16 4

Between 10th and P.G 8 1 19 5

Total 47 13 41 18χ2 = 17.19 Ho is rejected

Table 6: Relation between Level of Education and Capacity to Sign

Education Andhra Pradesh Karnataka

Yes 8 40

No 12 12

Total 20 52

χ2 = 79.78 Ho is rejected




Table 7: Relation between Level of Education and Motivating others

Level of Education Andhra Pradesh Karnataka Total

NIL 22 16 38

Below 10th

27 18 45Between 10

tand P.G 11 26 37

Total 60 60 120χ2 = 8.83 Ho is rejected

Table 8: Relation between Awareness and Approaching Informal Sources

Level of awareness Customers Karnataka Total

Yes No Yes No

Yes 28 25 40 11 104

No 3 4 2 3 12

Total 31 29 42 14 116

χ2 = 3.64 Ho accepted

APPENDICES II

A) Questionnaire for Customers/users

QUESTIONNAIRE ON FINANCIAL INCLUSION (for Customers)

General Profile of the Customer

a) District b) Mandal c) Village

Name of the member:

Caste

Sex

Age

Education

Are you able to put your signature: YES/NO

Your daily income:

Savings related information

Do you generally save your money? YES/NO

Prior to opening account at CSC, where were you depositing your savings?

a) Post office b) Bank c) Mahila Bank (SHG)

d) Chits e) Private lending f) Cooperative Bank

g) Any other — specify

Account Opening Details: ( with BC)

Since how many months you have been the customer at this CSC?

a) Less than 6 months b) between 6 and 12 months c) More than 12months

Amount of initial deposit:




Amount of current daily saving:

Did you face any problem while opening or operating the account with the BC? Yes/No

If yes, please specify:

Reasons for opening the account:

a) to get awareness b) to serve the society c) to repay the loan instalments

c) to enjoy better health d) to save for future e) to be free from other informal sources

f) to give education for children g) any other (specify) h) to enjoy financial freedom

Financial Services at the BC point

Services provided at the BC point:

a) Deposits b) Remittances c) Insurance d) Withdrawals e) Fund transfers f) Any other – (specify)

Are you aware of various services available with BC? YES/NO

If yes, how did you get to know? Please specify?

How do you authenticate your transactions?

a) Signature b) Thump impression

What you feel is the next urgent facility that you require from this point?

a) loan Repayment b) Loan sanctioning and disbursement c)Draft facility

d) Payment for utility services

Loan details

Details of Loans availed: internal loan, SHG loan and other Private loans

CategoryPurpose of

Loan

Principal

Amount

Rate of

Interest %

Date of

Loan

Amount

Paid

Amount to

be Paid

Are you still approaching the informal sources of financing (Money-lenders) Yes/No

If yes, please specify the reasons:

Economic Benefits of Opening of an Account in the Bank

Whether it was useful to your business/occupation YES/NO

If no, Can it be due to the following reasons?

a) Limit of loan insufficient b) not aware of loan facility

c) did not get good response at the bank/BC point

d) did not get required guidance at BC point e) all the above




What is your present weekly income ?

a) < 1000 b) Between 100 and 1500 c) Above 1500

Are you financially independent after opening an account YES/NO

According to you, is it safe to keep the savings with the BC point or other sources?

If other sources, please specify:

Do you think that opening of SB account at this BC point has benefited you in improving any of the following ways?

a) Income levels Yes/NO

b) Saving level Yes/No

c) Standard of living Yes/No

d) Children’s education Yes/No

e) To meet Health Emergencies Yes/No

f) Status in the society Yes/NO

g) Financial freedom Yes/No

h) Repay the loans Yes

Do you share this information; and motivate the members of the village to avail these benefits?

YES/NO

In your opinion, what are present problems implementing the FI plan of the

Govt.? Pleae specify:

What suggestions do you offer to improve the performance efficiency of FI

APPENDICES III

B) Questionnaire for non-Users of the Facility at the CSP

QUESTIONNAIRE ON FINANCIAL INCLUSION (For Non – Users)

General Profile of the Customer

a) District b) Mandal c) Village

Name of the respondent:

Caste

Sex

Age

Education

Members in the family:

Relation with members Sex Age Education Occupation

Savings Related Information

Where do you deposit your savings?




a) Post office b) Bank c) Mahila Bank (SHG) d) Chits

e) Private lending f) Cooperative Bank g) Any other — specify

Are you aware of the services BC point is offering? Yes/No

If yes, why are you not availing the facility? Please specify.

Are you aware of various services available with BC? YES/NO

If yes, how did you get to know? please specify?

Loan Details

Details of Loans availed: internal loan, SHG loan and other Private loans

CategoryPurpose of

Loan

Principal

Amount

Rate of

Interest %

Date of

Loan

Amount

Paid

Amount to

be Paid

Are you still approaching the informal sources of financing? Yes/No

If yes, please specify the reasons:

What is your present weekly income?

a) < 1000 b) Between 1000 and 2000 c) 1500 and above

Are you financially independent? YES/NO

If no, who supports you financially?

a) Spouse b) Children c) Parents d) others (specify)

According to you, is it safe to keep the savings with informal sources? Yes/No

What do you feel when people known to you are enjoying the financial services

offered in the village itself? (Please specify)

Do they share this information with you; and motivate you to avail the same?

YES/NO

In your opinion, what are the problems you are facing which are preventing

you from using the financial services at BC point? (Please specify)

What suggestions do you offer for making you use the present financial services offered?

Do you feel that these services are offered for citizen’s benefit or Bank’s benefit? (specify your opinion)

Are you willing to avail this facility if it is started in your villages? YES?NO

Are you able to put your signature or do you use thumb impression?

9.Copy of Economics - IJECR - Financial Services - Challa Radhakumari - OPaid (1)

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