Aatmanirbhar Bharat: Paving the Way for Financial Inclusion in India

Aatmanirbhar Bharat, launched by the Government of India in 2020, aims to make India self-reliant. A key part of this initiative is financial inclusion, ensuring everyone, especially the underserved, has access to essential financial services.

This initiative drives socioeconomic growth, affecting gender equality, financial literacy, entrepreneurship, and social stability. The financial inclusion index in India has improved from 43.4 in 2017 to 60.1 in 2023, showing real progress. This boost has positively impacted the economy, proving that giving people and businesses access to affordable financial services works.

However, challenges remain. For instance, the demand for commercial loans by MSMEs grew by 29% in 2023, but the supply didn’t keep up, creating a significant financial gap. Women-owned businesses, numbering between 13.5 to 15.7 million, still face major credit gaps due to social biases in financial institutions.

Several obstacles hinder financial inclusion. Small businesses often lack formal financial records, making it hard to get credit. There is also a need for new and inclusive lending practices. For women, cultural norms and limited financial literacy make banking difficult. Women-owned businesses are often seen as riskier and lack sufficient collateral for loans.

Additionally, last-mile connectivity remains an issue, especially in rural areas with poor infrastructure and limited internet access. Despite the presence of financial institutions, reaching remote villages is costly, making it economically challenging. Aatmanirbhar Bharat is making strides, but there’s still work to be done to ensure complete financial inclusion for all.