Financial Inclusion in Arunachal Pradesh (India): Examining Credit Access
DOI:
https://doi.org/10.63635/mrj.v1i4.187Keywords:
Financial Inclusion, Credit Accessibility, Institutional and Non-Institutional Sources, AOD, IOI, Arunachal Pradesh, North Eastern Region (NER)Abstract
Financial inclusion has been recognized as a critical driver of equitable economic growth and poverty reduction, particularly in developing economies. The study explores the extent of financial inclusion in Arunachal Pradesh, focussing on the accessibility and distribution of credit among rural and urban households. Using secondary data from the All India Debt and Investment Survey (AIDIS) report conducted in 2019, this research explores deposit accounts, AOD, IOI and cash outstanding at various rate of interest to evaluate variations in access to credit across rural and urban sectors, social categories, and different lending institutions. The findings suggest that account holder, AOD, and household indebtedness are more in urban areas of Arunachal Pradesh. However, reliance on non-institutional credit, particularly in urban areas, is highest in Arunachal Pradesh among the North Eastern Region (NER). This shows that the current efforts of financial institutions are inadequate to satisfy the urban credit requirements to achieve financial inclusion. Moreover, the lesser share of deposit account and indebted households in rural areas of Arunachal Pradesh reflects a poor outreach and accessibility of official financial institutions among rural households. The study highlights the need for targeted policy measures to promote equitable access to credit in Arunachal Pradesh.
Downloads
References
[1] Dev, S. M. Financial inclusion: Issues and challenges. Economic and political weekly, 2006, 4310-4313.
[2] Report of the Committee on Financial Inclusion. Reserve Bank of India. 2008. (accessed on 30 October 2025).https://www.findevgateway.org/sites/default/files/publications/files/mfg-en-paper-report-of-the-committee-on-financial-inclusion-jan-2008.pdf
[3] Sahay, R.; Čihák, M.; N’Diaye, P.; Barajas, A.; Mitra, S.; Kyobe, A.; Mooi, Y. N.; Yousefi, S. R. Financial inclusion: Can it meet multiple macroeconomic goals? (IMF Staff Discussion Note No. 15/17). International Monetary Fund, 2015.
[4] Ozili, P. K. Theories of financial inclusion. In Uncertainty and challenges in contemporary economic behaviour . Emerald Publishing, 2020, 81–95. https://doi.org/10.1108/978-1-80043-095-520201007
[5] CRISIL Inclusix: Financial inclusion surges, driven by Jan-Dhan Yojana. 2018, 4. (accessed on 30 October 2025), https://www.crisil.com/content/dam/crisil/our-analysis/reports/Research/documents/2018/march/crisil-inclusix-financial-inclusion-surges-driven-by-Jan-Dhan-yojana.pdf
[6] 67 and rising: India’s financial inclusion gains momentum [Press release]. Press Information Bureau. Government of India. 2025. (accessed on 30 October 2025),https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154980&ModuleId=3®=3&lang=2
[7] Hoda, A.; Terway, P. Credit policy for agriculture in India: An evaluation (ICRIER Working Paper No. 302). Indian Council for Research on International Economic Relations, 2015. https://icrier.org/publications/credit-policy-for-agriculture-in-india-an-evaluation/
[8] Banerjee, A. V.; Duflo, E. Poor economics: A radical rethinking of the way to fight global poverty. NY: PublicAffairs, New York, 2010.
[9] Eastwood, R.; Kohli, R. Directed credit and investment in small-scale industry in India: Evidence from firm-level data 1965–78 .(Discussion Paper No. 02/97). Department of Economics, University of Sussex Business School, 1997. https://ideas.repec.org/p/sus/susedp/02-97.html
[10] National Strategy for Financial Inclusion. Reserve Bank of India. 2024. . (accessed on 30 October 2025). https://www.rbi.org.in/commonman/Upload/English/Content/PDFs/English_16042021.pdf
[11] Kumar, A.; Sonkar, V. K.; Saroj, S. Access to credit in eastern India: Implications for the economic well-being of agricultural households. Economic and Political Weekly, 2020, 55(21), 46–54.
[12] Jena, S. K. and Eichir, L. Financial Inclusion in Arunachal Pradesh –An Analysis of Problems and Constraints. International Journal of Advanced Scientific Research and Management,2018. 3(6).
[13] Financial Inclusion. World Bank Group. (accessed on 30 October 2025),https://www.worldbank.org/en/topic/financialinclusion/overview
[14] Gurley, J. G.; Shaw, E. S. Money in a theory of finance. Washington, DC: The Brookings Institution, 1960.
[15] Leland, H. E.; Pyle, D. H. Informational asymmetries, financial structure, and financial intermediation. The Journal of Finance, 1977, 32(2), 371–387. https://doi.org/10.2307/2326770
[16] Löfgren, K. G.; Persson, T.; Weibull, J. W. Markets with asymmetric information: The contributions of George Akerlof, Michael Spence and Joseph Stiglitz. The Scandinavian Journal of Economics, 2002, 104(2), 195–211.
[17] Kaboski, J. P.; Townsend, R. M. The Impact of Credit on Village Economies. American Economic Journal: Applied Economics,2012, 4(2), 98–133. https://dspace.mit.edu/bitstream/handle/1721.1/73197/Townsend_The%20Impact.pdf?sequence=2&isAllowed=y
[18] Assouto, A. B.; Houngberne, D. J. Access to credit and agricultural productivity: Evidence from maize producers in Benin. Cogent Economics & Finance,2023, 11(1), 1-22.
https://doi.org/10.1080/23322039.2023.2196856
[19] Bernanke, B. S. Credit in the macroeconomy. Federal Reserve Bank of New York Quarterly Review, 1993, 18(1), 50–70.
[20] Ndoye, A.; Barajas, A. Financial inclusion. In S. R. A. Ayyash, P. Deb, & B. L. Jang (Eds.), Promoting inclusive growth in the Middle East and North Africa: Challenges and opportunities in a post-pandemic world. Washington, DC: International Monetary Fund, 2022, 203–228.
[21] Cicchiello, A. F.; Kazemikhasragh, A.; Monferra, S.; Cosma, S.; Orlando, B. Financial inclusion and development in the least developed countries in Asia and Africa. Journal of Innovation and Entrepreneurship, 2021. https://doi.org/10.1186/s13731-021-00190-4
[22] Global financial development report 2014: Financial inclusion. World Bank Publications, 2014. https://documents1.worldbank.org/curated/en/225251468330270218/pdf/Global-financial-development-report-2014-financial-inclusion.pdf
[23] Morgan, P. J.; Zhang, Y.; Kydyrbayev, D. Overview of financial inclusion, regulation, financial literacy, and education in Central Asia and South Caucasus (ADBI Working Paper No. 878). Asian Development Bank Institute, 2018.
[24] Atkinson, A.; Messy, F. Promoting financial inclusion through financial education: OECD/INFE evidence, policies and practice (OECD Working Papers on Finance, Insurance and Private Pensions, No. 34), OECD Publishing, Paris, France, 2013. https://doi.org/10.1787/5k3xz6m88smp-en
[25] Sen, A. Social exclusion: Concept, application, and scrutiny (Social Development Papers No. 1). Asian Development Bank, 2000.
[26] Mader, P. Contesting financial inclusion. Development and Change, 2018, 49(2), 461–483. https://doi.org/10.1111/dech.12368
[27] All India Debt and Investment Survey (AIDIS). Ministry of Statistics and Programme Implementation. Government of India. 2019. (Accessed on 6 June 2023). Retrieved from https://mospi.gov.in/sites/default/files/publication_reports/Report%20no.%20588-AIDIS-77Rm-Sept.pdf
[28] Bose, P. Formal-informal sector interaction in rural credit markets. Journal of Development Economics,1998, 56(2), 265-280.
[29] Madestam, A. Informal finance: A theory of moneylenders. Journal of Development Economics, 2014, 107, 157–174. https://doi.org/10.1016/j.jdeveco.2013.11.002
[30] Ayyagari, M., Demirgüç-Kunt, A.; Maksimovic, V. Formal versus informal finance: Evidence from China. The Review of Financial Studies, 2010, 23(8), 3048–3097. https://doi.org/10.1093/rfs/hhq030
[31] Bottomley, A. The Structure of Interest Rates in Underdeveloped Rural Areas. American Journal of Agricultural Economics,1964, 46(2), 313-322. https://doi.org/10.2307/1236537
[32] Interest rate ceilings and microfinance: The story so far (Occasional Paper No. 9). 2004. Consultative Group to Assist the Poor. (accessed on 30 October 2025),https://www.cgap.org/sites/default/files/CGAP-Occasional-Paper-Interest-Rate-Ceilings-and-Microfinance-The-Story-So-Far-Sep-2004.pdf
Downloads
Abstract Display: 47 
PDF Downloads: 45 Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright © Author(s) retain the copyright of this article.
