Authors: Kummari Mahesh, Mr.Bh.L.Mohan Raju
Abstract: Financial inclusion has become one of the most important drivers of inclusive economic growth, particularly in developing economies like India. A large segment of the Indian population, especially those living in rural and semi-urban areas, has traditionally been excluded from formal financial systems due to various barriers such as low income, lack of financial awareness, inadequate banking infrastructure, and reliance on informal sources of credit. These challenges have led to financial inequality and limited economic opportunities for underserved populations. In order to address these issues and promote inclusive growth, the concept of financial inclusion has gained prominence, focusing on providing affordable and accessible financial services to all sections of society. In this context, Small Finance Banks (SFBs) were introduced as a significant initiative to enhance financial inclusion. These banks are specifically designed to serve the needs of low-income groups, small business owners, micro-entrepreneurs, and rural populations. The primary objective of SFBs is to provide basic banking services such as savings accounts, deposits, loans, and digital banking facilities to individuals who are often neglected by traditional commercial banks. By targeting underserved segments, SFBs play a crucial role in bridging the gap between formal financial institutions and economically weaker sections of society.
