Financial Inclusion in Circular Economy: A Bumpy Road Towards Sustainable Development (Circular Economy and Sustainability)

This book presents an assessment of endeavors towards Financial Inclusion and its role in Sustainable development. An attractive feature is that it deals with almost all the contemporary issues essential for reaching UN Sustainable Development Goals. This book would be an exclusive and authentic source to the students of undergraduates, postgraduates and professional courses in Commerce and Management. This manuscript is divided into nine chapters. The book looks at various salient topics, including financial inclusion measurement, the impact of various financial inclusion indicators on development outcomes and macroeconomic volatility using aggregate data, and the effects of financial inclusion on poverty and development outcomes using microdata. Using the recently adopted Sustainable Development Goals as an overall framing of the issues, it exhibits how poor and disadvantaged women and men can be bankable if the adequate facilitation for maximizing opportunities and addressing constraints. This book attempts to cover different dimensions of Financial Inclusion towards attaining Sustainability and Circular Economy through financing instruments and investments. This book highlights different goals of UN SDG as an Initiative towards Inclusive Growth and Circular Economy, which is also influenced by Micro Finance Institutions and NBFCs. This book will be an indispensable source for the Students of PG and UG programs, Researchers and practitioners from areas of Commerce, Economics and Management and the faculty members and professionals like bankers and financial consultants. We hope this book will meet the requirement of all the categories of readers. Foreword 6 Preface 8 Contents 10 About the Authors 14 List of Figures 16 List of Tables 17 Chapter 1: Sustainable Development Goals – An Initiative towards Inclusive Growth and Circular Economy 18 1.1 Introduction 18 1.2 Financial Inclusion and Sustainability: The Long-Term Perspective 21 1.3 FinTech, Financial Inclusion and Sustainability 22 1.4 Financial Inclusion, Sustainable Cities, and Sustainable Development Goals 23 1.5 Financial Inclusion and Economic Growth 25 1.6 Sustainability Through FinTech and Financial Inclusion: Four Pillars of Digital Financial Transformation 28 1.7 Sustainability and Circular Economy 28 1.8 Societal Impact of a Circular Economy 30 1.9 Developing a Comprehensive Strategy 31 1.10 Conclusion 32 References 34 Chapter 2: Key Drivers and Challenges for Financial Inclusion 39 2.1 Introduction 39 2.2 Literature Review 43 2.2.1 Financial Inclusion and Fintech 43 2.2.2 SHGs, Women Empowerment and Financial Inclusion 45 2.2.3 Financial Inclusion and Financial Literacy 46 2.2.4 Financial Inclusion and Income Inequality 47 2.2.5 Financial Inclusion, Financial Well Being and Financial Capability 48 2.2.6 Scams, Fake Transactions, and Cyber Issues 49 2.3 Research Design 49 2.4 Data Analysis and Interpretation 50 2.5 Conclusion and Implications 68 References 69 Chapter 3: Socio-economic Impact of Financial Inclusion 75 3.1 Introduction 75 3.2 Theoretical Background 78 3.2.1 Socio-economic Development Theory 78 3.2.2 Development Theory 78 3.2.3 Theory of Social Exclusion and Inclusion 79 3.2.4 Financial Inclusion, Poverty and Income Inequality 80 3.2.5 Contribution of Financial Inclusion Towards Socio-economic Development 83 3.3 Sustainable Financial Inclusion Theory 84 3.4 Importance of SHGs in Socio-economic Development 87 3.5 Challenges Faced by SHGs 88 3.6 Conclusion 88 3.7 Implications 90 References 90 Chapter 4: Financial Literacy for Promoting Sustainability 94 4.1 Introduction 94 4.2 Importance of Financial Literacy for Financial Inclusion 96 4.3 Financial Inclusion and Financial Literacy 97 4.4 Financial Literacy and Investment Behavior 99 4.5 Financial Literacy and Digitalization 100 4.6 Conclusion 101 References 102 Chapter 5: Financial Capability and Financial Well-Being for a Sustainable Society 105 5.1 Introduction 105 5.2 Theory of Financial Well Being 109 5.3 Financial Education and Financial Capability 109 5.4 Financial Capability and Well-Being 110 5.5 Financial Capability, Financial Well Being and FinTech 111 5.6 Conclusion 112 References 113 Chapter 6: Expanding Financial Inclusion Through Fintech and E-governance 117 6.1 Introduction 117 6.2 Financial Inclusion and Fintech 118 6.3 Artificial Intelligence, Blockchain, and Financial Inclusion 127 6.4 Scams, Fake Transactions, and Cyber Issues 129 6.5 Financial Inclusion and E-governance 130 6.6 Perceptions, Usage and Usefulness of Cashless Transactions 132 6.7 Technology 133 6.8 Demonetization 133 6.9 Discussion 134 6.10 India’s Journey Towards a Cashless Economy 135 6.11 Factors Impacting India to Become a Cashless Economy 136 6.12 Conclusion 136 References 137 Chapter 7: Financial Inclusion for Empowering Women – Way Ahead 144 7.1 Introduction 144 7.2 Literature Review 147 7.2.1 SHGs, Women Empowerment and Financial Inclusion 147 7.2.2 Gender Dimension, Economic Development, and Financial Inclusion 152 7.3 Women’s Empowerment 154 7.3.1 Indian Scenario 154 7.3.2 Factors Behind the Need for Empowerment 155 7.3.3 Important Aspects of Empowerment 156 7.3.4 Ways to Empower Women 157 7.3.5 Government Schemes and Programmes for Women’s Empowerment 157 7.3.6 Initiatives by Non-Government Organisations (NGOs) 159 7.4 CSR Activities in India 160 7.5 Present Scenario and Future Challenges for Women’s Empowerment Through SHGs 161 7.6 Suggestions for Women’s Empowerment Through SHGs 162 7.7 Policy Implications 163 7.8 Theoretical Contribution 163 7.9 Conclusion 164 References 165 Chapter 8: MFIs and NBFCs Contributions Towards Financial Inclusion and Circular Economy 169 8.1 Introduction 169 8.2 Women and Microfinance 170 8.3 Microfinance in India 171 8.4 Public Good Theory of Financial Inclusion 172 8.5 Dissatisfaction Theory of Financial Inclusion 172 8.6 Vulnerable Group Theory of Financial Inclusion 173 8.7 Systems Theory of Financial Inclusion 173 8.8 Community Echelon Theory of Financial Inclusion 173 8.9 Public Service Theory of Financial Inclusion 174 8.10 Theories of SHGs 174 8.11 SHG Model in Bangladesh 175 8.12 Financial Inclusion Through SHGs 176 8.13 Self-Help Group 177 8.13.1 Composition of the Self-Help Group 177 8.13.2 Subsidy Norms for SHGs and Disabled Persons 177 8.14 SHG Bank Linkage Program 178 8.14.1 Working of the Program 178 8.14.2 Aims and Objectives 179 8.14.3 The Background 179 8.15 SHGs in India 179 8.16 History of SHG Credit Bank Linkage Program 181 8.17 Finclusion Through Self-Employed Women Association 181 8.18 NABARD’s SHG Bank Linkage Program 182 8.19 Models of SHG-Bank Linkage in India 183 8.20 SHG and Women Empowerment 184 8.21 Initiatives for Sustainable Development Through SHGs 184 8.22 Micro Finance for Financial Inclusion of SHGs 185 8.23 Financial Inclusion Theory: Importance of Access to Finance 188 8.23.1 Intensifying Access to Financial Services 189 8.23.2 The Inclusivity of Access to Financial Services 190 8.24 Conclusion 193 8.25 Policy Implications 194 References 194 Chapter 9: Financial Sector Governance Policies and Regulations 197 9.1 Introduction 197 9.2 Meaning of Access to Financial Services and the Early Initiatives 200 9.3 Expanding Access to Financial Services 201 9.3.1 Measure 202 9.3.2 Impact 203 9.3.3 Policy 204 9.4 The Inclusivity of Access to Financial Services 207 9.5 Role of Regulators in Indian Scenario 208 9.5.1 The Past 208 9.5.2 Present Scenario 209 9.5.3 The Future 211 9.6 Financial Inclusion Initiatives Taken by Government 212 9.6.1 Effect of Pradhan Mantri Jan Dhan Yojana 213 9.6.2 Some of the Realities That Could Burden the Success of the Scheme 214 9.7 Conclusion 216 References 216