Self Help Groups (SHGs) and Financial Inclusion- A Case Study in Baksa District of Assam

Financial inclusion has become a policy priority to “inclusive growth” in India. Financial inclusion of the poor can ultimately result in reduction of poverty instigating inclusive growth. Financial inclusion refers to a situation where people in general have basic formal banking/financial practices. Conversely people in general having no such basic habits are financial excluded. The north eastern region of India is having the highest number of population outside the ambit of formal banking system with more than 70 percent of the districts of Assam with an exclusion rate of 96.1-98.5 percent. The SHG-bank linkage programme has emerged in as an effective instrument for basic financial services to common section of the society. The programme has helped in providing banking services to the uncovered rural poor. This paper examines the impact Self-Help Groups (SHGs) on financial inclusion of rural people in the district of Baksa, Assam. A total of 180 respondents [(90 participants) and (90 nonparticipants)] were selected for the purpose of the study and the overall results revealed that the SHG-Bank linkage programme increased the degree of financial inclusion among SHG households as compared with non-participants households.