Access to financial services or financial inclusion plays a very important role in bringing prosperity to a poor household. It connects the excluded with the formal banking system in order to help them obtain an understanding of the financial services available equipping them with the confidence to make informed financial decisions. The credit to deposit ratio of Bihar at 37% (an indicator of availability of credit) is one of the lowest in India. In addition, each bank branch serves over 22,000 people, which is much higher than the national average. A recent study commissioned by JEEViKA also estimated that less than 10% poor have access to institutional credit in the surveyed districts. These factors have contributed to poor households depending on informal sources of credit at high interest rates.
JEEViKA’s social mobilization efforts of organizing over 1 million households into Self Help Groups (SHGs) have been accompanied with focused efforts to improve both the demand and supply side of credit. The capacity of these community institutions has been built by helping them manage their own finances and by providing financial literacy services and education. Simultaneously, the project has worked with various financial institutions including commercial banks and regional rural banks to improve their responsiveness and provide better quality services to poor households. These efforts have significantly improved access to credit among the rural poor.
Going forward, JEEViKA is committed to ensuring access to financial services to the poor by supporting innovations in financial services such as savings, credit, pension, insurance and remittance. These may include alternate banking models in the form of kiosks, hand held devices, mobile banking etc. as well as novel mechanisms for awareness generation, financial literacy and credit counseling.