Financial Inclusion Survey Report Rajasthan

Transcription

1 Financial Inclusion Survey Report Rajasthan Phanipriya Nandula Centre for microfinance D-240, D Block, Behind World Trade Park, Malviya Nagar, Rajasthan

2 Table of Contents Table of Content: 1. Centre for microfinance An introduction: Introduction to study on Financial Inclusion in the state of Rajasthan: Sampling and data collection: Government initiatives on Financial Inclusion: Banking network in Rajasthan: Financial Inclusion in Rajasthan - Inclusix 2015: Characteristics of villages under study: Characteristics of participant households: Study findings: a. Number of Bank accounts: b. Government program under which accounts have been opened: c. Purpose for opening of bank accounts: d. Member accounts in various Banks: e. Avenues for saving: f. Withdrawal of amount deposited in bank: g. Points of transaction: h. Availability of Kisan Credit Cards: i. Loan outstanding with various agencies: j. Benefit transfer: k. Insurance: Conclusion: Annexure

3 List of abbreviations ATM BC Bob CmF CRISIL GOI JSY KCC KYC LIC MKSP MNREGA MoU MPOWER NABARD NBFC NGO NRLM PACS PMJDY RBI RRB SBBJ SHG SLBC Automated Teller Machine Business Correspondent Bank of Baroda Center for Microfinance Credit Rating Information Services of India Limited) Government of India Janani Suraksha Yojana Kisan Credit Card Know Your Customer Life Insurance Corporation of India Mahila Kisan Sashaktikaran Pariyojna Mahatma Gandhi National Rural Employment Guarantee Act Memorandum of Understanding Mitigating Poverty in West Rajasthan National Bank for Agriculture and Rural Development Non -Banking Financial Company Non Government Organization National Rural Livelihood Mission Primary Agricultural Credit Society Pradhan Mantri Jan Dhan Yojana Reserve Bank of India Regional Rural Bank State Bank of Bikaner and Jaipur Self Help Group State Level Bankers Committee 3

4 A report on Financial Inclusion in Rajasthan 1. Centre for microfinance An introduction: Centre for microfinance (CmF) is an autonomous organization registered under the Rajasthan Societies Act, CmF came into existence in 2005 in response to the need for an agency to guide the growth of microfinance and particularly, communitybased microfinance in Rajasthan. CmF employs high quality professionals to provide a wide range of technical and other support services to mf players. CmF has been providing capacity building and knowledge support to the Govt. of Rajasthan s Mitigating Poverty in West Rajasthan (MPOWER) project in Jodhpur ( reaching out to 52,000 households in six blocks of West Rajasthan. CmF also leads a consortium of six NGO partners implementing the Mahila Kisan Sashaktikaran Pariyojna (MKSP) a Government of India (GoI) project under National Rural Livelihood Mission (NRLM), which seeks to improve livelihoods of over 25,000 households through increased productivity in agriculture and livestock in eastern and southern Rajasthan. CmF supports community institutions across Rajasthan and few other states in the areas of research and networking. 2. Introduction to study on Financial Inclusion in the state of Rajasthan: The poorer sections of the community require financial services such as savings, credit, remittance, insurance and social security. However, most of the poor are excluded from the banking network and hence are dependent on informal sources, which are unpredictable and risky. In this regard, Reserve Bank of India (RBI) set up Khan Commission (2004) to bring the unbanked population of the country in to the ambit of formal financial institutions. The recommendations include opening of no frill accounts and minimum KYC (Know Your Customer) norms. RBI has been encouraging banks to open no frills accounts, which are zero balance accounts from the year 2005 onwards. At the macro level, scenario on microfinance is changing rapidly owing to greater focus on financial inclusion. Government is making efforts to connect the excludedto the mainstream financial services. The SHG model has also received major thrust with the advent of the National Rural Livelihoods Mission. The Microfinance institutions are also continuing to provide services of credit. Similarly, institutions such as NABARD have been focusing on building capacities of poor in taking financial decisions through financial literacy initiatives. With this backdrop, many studies have been taken up at the national level with respect to coverage and usage of the bank accounts in the context of financial inclusion. However, studies at the state level are fairly limited. Also, owing to inclusive financial policies of the government, though the state has shown impressive coverage of people in terms of bank accounts, usage of the same for improving the economic status of the poor is not known. Hence, state (Rajasthan) level study to understand outreach, access and usage of financial services from formal and informal institutions in rural areas for policy level advocacy at the state level has been executed by CmF. Following are the specific objectives of the study: 4

5 1. To understand the outreach of financial institutions. 2. To understand access to Financial Services at rural Households. 3. To understand the usage of various formal financial services offered by different channels. 3. Sampling and data collection: The survey was conducted in ten districts, one eachfrom the 10 agro-climatic zones in Rajasthan. One block 1 per each district was selected for the study. In total, 2,014 householdswere studied in 10 villages per block. Villages were identified based on distance from the block headquarters. Villages near the block headquarter and those that lie in the most interior localities of the block were selected for the study.equalnumber of households from each hamlet/lane of the village was covered. The study was administered with the help of a questionnaire, which was field tested and modified suitably. Data was collected from the field with the help of partner organization of CmF, who were actively involved in supervising the process of data collection. A team of investigators (staff of federations and NGOs in Rajasthan) who were trained in data collection by CmF participated in collecting field level information. 4. Government initiatives on Financial Inclusion: Financial Inclusion initiatives in the state of Rajasthan are being taken up by department of Women and Child Welfare, department of Rural Development, Bank of Baroda (BoB) as convener of SLBC, State Bank of Bikaner and Jaipur (SBBJ); State Bank of India and several others in addition to Reserve Bank of India and NABARD (Ayitam n.d.). Also, services of various NGOs have been taken in order to train SHG members on financial inclusion and financial literacy. Following are the various schemes being implemented in Rajasthan in order to promote financial inclusion. Bhamashah Yojana: In addition to the Financial inclusion programs that are implemented by the center, government of Rajasthan has launched Bhamashah yojana on 15th August 2014 with an investment of 600 crore to transfer financial and nonfinancial benefits of governmental schemes directly to recipients. Bhamashah Yojana, which was re launched in 2014 (launched in 2008) aims at financial inclusion and women empowerment. Benefits under various schemes such as social security pensions, MNREGA, Janani Suraksha Yojana, and Shubha Lakshmi Yojana etc. worth Rs million have been transferred through e kiosks. Under the scheme, 38 million persons and 11 million households have been linked. Pradhan Mantri Jan Dhan Yojana: In the state of Rajasthan, Pradhan Mantri Jan Dhan Yojana has been linked with Bhamashah scheme and hence co branded cards has been issued. As on December 2015, 15.8 million accounts have been opened and 55.36% of these accounts have been Aadhar seeded. 54 million people have registered for aadhaar scheme till December 2015 in the state. Also, 30,000 e mitra kiosks are 1 Pindwara (Sirohi), Ramgarh (Alwar), Dausa (Dausa), Banswara, Niwai (Tonk), Japal (Nagaur), Suratgarh (Sri Ganganagar), Pokhrama (Jaisalmer), Baytu (Barmer), Bali (Pali). 5

6 operational in the state and have done a business of Rs.2500 million with 2 million transactions per month. Pradhan Mantri Jivan Jyoti Bima Yojana: The scheme provides one-year renewable life insurance of Rs.2 lakhs on payment of Rs.330 as premium. As on December 2015, 1.01 million persons have been insured in the state under this scheme. Pradhan Mantri Surakshan Bima Yojana: Similar to Jivan Jyoti Bima Yojana, sum insured is Rs.2 lakhs which is provided on subscriber s death or disability due to accident. Under the scheme, 3.75 million persons have been enrolled as on December Cooperative life insurance scheme: The scheme provides life insurance to cooperative banks, persons who have taken loans from PACS, shareholders and staff after getting approval from the state government. The cooperative banks have signed a MoU with LIC in this regard during the year 2015 to continue the scheme till end of financial year of Under the scheme, 1.95 million persons of the state have paid a premium of Rs.482 million to the insurance company. 5. Banking network in Rajasthan: The number of bank branches in the state increased from 5733 in March 2013 to 7286 in the year 2016 indicating Cumulative Annual growth rate of 6.17%. Commercial bank Name Branches (March 2016) branches expanded by 7.08% annually; while, RRBs and Commercial banks RRBs Cooperative banks Total Rural Semi urban Urban Total Cooperative banks increased by 5.29% and 1.30% respectively. Commercial bank branches expanded by 7.08% annually; while, RRBs and Cooperative banks increased by 5.29% and 1.30% respectively. Out of the total bank branches in the state,72.1% of Table 1: Bank branches in Rajasthan branches are commercial, 19.5% Regional Rural Banks (RRBs) and Source: SLBC, Rajasthan 8.4% cooperative banks % of banks are located in rural areas, 30.89% in semi urban and 27.16% in urban areas. India recorded a growth rate of 7.32% in September 2016 when compared to the previous year, while Rajasthan recorded a growth rate of 8.33%. Taking in to consideration Scheduled Commercial Banks alone, as on September 2015, there are 6408 bank branches with 8.33% increase in number of branches over The growth rate of India however is lesser than that for Rajasthan during the same period. SBI and its associates have recorded highest increase in terms of expansion of their bank 6

7 branches in the state of Rajasthan, while the foreign banks did not take up any Table 2: Growth of banking network in Rajasthan S. No Scheduled Commercial Bank Rajasthan India initiative. Percentage of households with bank accounts in the state of Rajasthan increased from 28.9% in 2001 to 68.02% in the year Rural households registered 43.42% growth. According to census data, only 36 per cent of Indian households had access to banking services in 2001; this increased to 59 per cent in There are a total of grampanchayats in the state of Rajasthan. Around 21% of the gram panchayats have a brick and mortar branch, while in 77% S. No Households Rural Urban Total 2001 (%) (%) Business Correspondent is providing banking services. According to SLBC, plans for setting up 171 new brick and Sep-14 Sep-15 % Growth Sep-14 Sep-15 % Growth 1 Regional Rural Bank SBI and its Associates Nationalized Banks Foreign Banks Private sector banks S. No District CRISIL inclusix Score Rank 2 1 Alwar Barmer Banswara Dausa Jaisalmer Nagaur Pali Shriganganagar Sirohi Tonk Table 4: Inclusix score for select districts in Rajasthan Total Table 3: Households with bank accounts - Rajasthan and India Source: Census of India-2001 and 2011 mortar branches are in place for villages with more than 5000 population without a bank branch of Scheduled Commercial Bank or Regional Rural Bank (RRB). 6. Financial Inclusion in Rajasthan - Inclusix 2015: Though percentage of households with bank accounts increased from 28.9% in 2001 to 99.9% in 2016, in terms of financial inclusion, 2 Out of 652 districts of India 7

8 Rajasthan scored 25 on CRISIL Inclusix 3 score, which is considered below average. Also, Rajasthan happens to be one of the bottom scoring states in CRISIL index. In terms of penetration of branches and deposits, Rajasthan has scored above average and in penetration of credit, below average. Dholpur and Barmer are in the bottom 50 districts on inclusix score. Rajasthan occupies 29 th position out of 35 states of the country. Among the districts under study, Shriganganagar is the only district that scored above 50 in inclusix and is very near to be called a district with above average inclusix score. Also, Shriganganagar happens to be the district, which has scored more than the national inclusix score of Barmer has scored only 23.1 and is considered to have scored low in inclusix. None of the districts of the state appeared in the top 50-district list. 7. Characteristics of villages under study: Distance of village from block headquarter:more than 73% of the villages are situated within twenty-six kilometers from the block headquarter. 15.6% of the villages are situated between 26 and 50 kilometers, while S. No Distance (km) to to 50 Villages (%) around 9% of the villages are fairly far away from the block headquarter and situated within 51Km and 75 Km. Only one village (KapoorD) in Baitu subdivision of Barmer district of Rajasthan is located 100 kilometers 4 51 to from the block headquarter. Among those villages that 5 76 to are located more than 25km from the block Total 100 headquarter; only 24% of them have bank branches in their village. Table 5: Distance of village from block Number of households in the villages:around 15% of the villages that were included in the study can be term as S. No Village Category Villages (%) small with less than Small villages (under 101 households) 15.1 households. Majority of the 2 Medium (101 to 400 households) 38.7 villages under the study are 3 Large (401 to 1000 households) 25.8 from medium category with Very large villages (over 1000 households) 20.4 to 400 households. Around 26% of the villages come under large Table 6: Size of the villages category and around 20% of them under very large category. Availability of banks:taking in to consideration household size4, 48% of villages have population of less than 2000, 46% have population between and 10,000 and 3 CRISIL Inclusix is a relative index that has a scale of 0 to 100, and combines three very critical parameters of basic financial services branch penetration (BP), deposit penetration (DP), and creditpenetration (CP) into one single metric. A CRISIL Inclusix score of 100 indicates the ideal state for each of the three parameters. 4 Household size of 5(Office of the Registrar General & Census Commissioner n.d.) for normal households 8

9 remaining 6% have a population more than 10,000. Overall, 28% of the villages had banks. In villages with less than 2000 population, only 15% 5 had banks. Similarly, in case of villages with population and more than 10,000 population, 34% and 83% of the total villages had banks (respectively). With respect to district wise data, none of the villages studied in Barmer and Sirohi had banks. In Pali and Dausa, highest (75% and 67% respectively) number of villages had banks. There are 48% of villages District Villages (%) < Total Villages with banks (%) Villages (%) Villages with banks (%) Villages (%) Villages with banks (%) villages with banks (%) Alwar Barmer Banswara Dausa Jaisalmer Nagaur Pali Shriganganagar Sirohi Tonk Total 48 7* 46 16* 6 5* 28 Table 7: Availability of banks in villages - population categories and districts *As percentage of total villages studied Out of those villages with a population of more than 10,000, 83% of them have a bank within 0-5km of their village. In 50% of them, more than one type of bank is available within 0 to 5 km. On an average, these villages have 1.1 banks per village within five kilometers radius. Also, there are 11 banks within 5-10 kilometers from the village, among which 60% are cooperative banks and 27% each are nationalized banks and RRBs. On an average, these villages have 1.4 banks within 5 km to 10km distance. Out of those villages with 2000 to 10,000 populations, 70% of the villages had at least one bank within five kilometers. A total of 65 banks are located within these villages, out 5 as percent of total villages in that particular category 9

10 of which 33% are nationalized, 18% are RRBs and 25% are cooperative banks.on an average, these villages have 1.5 banks per village. Also, there are 138 banks within 5-10 kilometers from the village, among which 52% are nationalized banks and 22% are RRBs and 26% are Cooperative banks. On an average, these villages have 3.1 banks within 5 km to 10km distance. S. No Population Banks/Village Out of those villages with less than 2000 Within 5km 5Km to 10Km population, 68% of them have at least 1 < one bank within a radius of five to kilometers. A total of 48 banks are 3.1 located within five kilometers radius, out of which 23% are nationalized banks, 29% are RRBs and 48% are cooperative Table 8: Banks within five kilometers from villages banks. These villages have 1.2 banks (banks/village) within five kilometers radius. As far as availability of banks within five to ten kilometers from the village is concerned, a total of 90 banks are available out of which 46% are nationalized banks, 22% are RRBs and 32% are cooperative banks. These villages have 2 banks per village on an average located within 5 to 10 kilometers. In 29% of the villages studied, there was no bank branch either within the village or within five kilometers from the village. Among these villages, 48% each have less than 2000 and to 10,000 population, while remaining 11% have more than 10,000 populations.around 9% of the total villages studied do not have any bank branch within their village or within ten kilometers from their village. Among these villages, 55% have less than 2000 population, 33% have population between 2001 and 10,000, while remaining 11% have more than 10,000 population. Post offices: Post offices are located within the village in around 28% of the villages. In around 51% of the villages, post office is located within a Location of post office Village (%) radius of 5 km from the village. However, in the rest, Within the village post offices are far away from the village and located Less than 2km between 6Km and 20km from the village. Postman is 3 km to 5km resident of the village in 38% of the cases only and in 6 km to 10km the rest he/she comes from outside the village. In 67% 11km to 20km 6.32 of the cases, though postman is not a resident of the village, he/she visits the villages regularly indicating Table 9: Location of post offices regular visits in spite of their residential status. In villages without a bank branch with in five-kilometer radius, 7% have post offices within the village and 55% of them have post offices within five kilometers from their village. In around 27% of the villages, post offices are located between 6km 10km and in the rest (10%), they are located at a distance of 11km and above from the village. 10

11 8. Characteristics of participant households: The study collected data from 2093 households from 98 villages (Annexure-2) of ten districts 6 (Annexure-1) of the state. Among the respondents, 66.8% were male. Taking in to consideration age categories (Annexure-3), 30.6% of the respondents are 31years and below, while 60.8% of the respondents are between 32 and 62 years old. In terms of household size (Annexure-4), 56.5% of respondents belong to small households with less than 5 members and 40.4% to households that are medium in size with 6-10 members. A small percentage (2.6%) of respondents are from large households with 11 to 15 members per households, while a miniscule (0.5%) are from very large households with 16+ members per household. Among the respondent households, 37.4% belong to Below the Poverty category. Agriculture livestock wage labour own business salaried 12% 2% 34% 27% 25% Figure 1Livelihood portfolio of respondent households The respondent households are dependent on a variety of livelihood options. 34% of the adults cultivate crops and nearly 25% each of the adults are dependent on livestock and wage labor respectively. 12% of adults have businesses of their own, while a small percentage (2%) of adults are employed either by government or private firms. With respect to various districts studied, Agriculture seems to be the choice of highest number of household members in Barmer, Jaisalmer, Nagaur, Shriganganar and Tonk districts, while Wage labour is the choice for Alwar, Dausa and Pali districts. Nagaur has the highest (41%) number of members dependent on agriculture as compared to other districts. Also, in this district the least number of members are dependent on Wage labor (20%) and on salary (3%). In Banswara, highest number of Table 10: Percentage of household members dependent on various livelihood options District Agriculture Livestock Wage labor Own business Salaried Alwar Barmer Banswara Dausa Jaisalmer Nagaur Pali Shri Ganga Nagar Sirohi Tonk Alwar, Barmer, Banswara, Dausa, Jaisalmer, Nagaur, Pali, Shriganganagar, Sirohi, Tonk 11

12 household members (20% and 12%) are dependent on own business and salary. Also, in this district the least number of households are dependent on agriculture (23%) as compared to other districts. Alwar has the highest (36%) number of household members depending on Wage labor. Less than 5% of the household members are dependent on salaried jobs in Barmer, Jaisalmer, Shriganganagar and Sirohi districts. Banswara has the highest (20%) number of household S. No 1 Farm category 7 Landless Frequency 915 Percent 45.4 members dependent on own business, 2 Marginal followed by Jaisalmer (18%). 3 Small Around 45% of the respondents are from landless households. Among those households who own land, 88% of them are marginal farmers, 7.3% small and rest of them belong to semi medium to medium categories. 9. Study findings: a. Number of Bank accounts: 4 Semi medium Medium Total Table 11: Farm categories of respondent households Almost all the households (99.06%) have opened at least one account with a bank. This is on par with the reports of Pradhan Figure 2: district wise share of accounts opened Mantri Jan Dhan Yojana(Yojana 2017), which reported coverage of 99.9% of Tonk Alwar households as on December In Sirohi 13% 10% Barmer 56.39% of households, all the adults 7% (18+age) hold accounts 8 9%. Out of the total Shri Banswar accounts opened by members of gangana a respondent households, women own gar 11% 11% 47.6% of the total. Nearly 1.5% of the households have joint account in addition Pali Dausa 7% Nagaur Jaisalmer 14% to individual accounts. In nearly 88% of 9% 9% the households, half to more than half of the adults hold bank accounts. In 5.26% of the households, less than 25% of adults hold bank accounts. Out of 6721 adults,80% members hold at least one account with any bank. These account holders operate 7633 accounts indicating 1.42 accounts per holder. Bank accounts: Taking in to consideration number of accounts in various districts, Dausa and Tonk districts have the highest share of 14% and 13% respectively. Though rest of the districts holds nearly 10% of the total share of accounts, Sirohi and Pali 7 Marginal -less than 1ha, small- 1-2ha, semi medium 2-4 ha, medium 4-10 ha and large-above 10ha 8 16% of the total accounts have been opened for scholarship and could minors open accounts. 12

13 districts have the least (7%) share of accounts. In terms of number of accounts per household, Dausa district S. No District Dausa Tonk Banswara Shri Ganganagar Alwar Acts/hh* S. No District Nagaur Jaisalmer Barmer Pali Sirohi Acts/hh* has 2.6 accounts per household, which is the highest in the districts studied, followed by Tonk which has 2.2 accounts per household. *Accounts per household In line with distribution of Table 12: Number of accounts per household - District wise accounts opened per district, Pali and Sirohi have only 1.3 accounts per household and are at the bottom of the list. Number of accounts opened by females out number those opened by males by 20% in Alwar, Pali and Sirohi districts. In Banswara however, both the sexes opened equal number of accounts. In rest of the districts, accounts opened by females is lesser than those opened by males by 10% to 20%. In Shriganganagar however, the difference is 30%, the highest among all the districts studied. b. Government program under which accounts have been opened: Taking in to consideration, government program under which accounts have been opened, 42% of the accountshave been openedunder Bhamashah scheme being implemented by the Jandhan Pension 42% Scholarship 1% MGNREGA 10% 9% Bhamashah Others government of Rajasthan for transfer of benefits. Around 21% of the accounts were opened for transfer of wages under MGNREGA. Students to enable transfer of scholarships have opened around 17% of the accounts. 17% Around 10% of accounts were opened under Pradhan Mantri Jan Dhan Yojana and 21% nearly 9% of accounts were opened for availing Table 13: Percentage of accounts opened under various government schemes bank accounts of the respondents. government pension. Bhamashah scheme has been very active in opening 13

14 Though financial inclusion program of government of India started in the year 2004, even after ten years of implementation, only 43%accounts were opened. However, after District Alwar Barmer Banswara Dausa Jaisalmer Nagaur Pali Before to Bhamashah was introduced in the year 2014 along with Pradhan Mantri Jan Dhan yojana, 57% of accounts have been opened between 2014 and Shriganganagar Sirohi Tonk In terms of opening of bank accounts in Total various years, districts Table 14: Account opened year wise and district wise such as Alwar, Jaisalmer, Nagaur, Pali and Shriganganagar followed an interesting pattern wherein nearly 40% of accounts were opened from 2004 to 2013 and 50% to 60% accounts were opened between 2014 and However in Barmer, Banswara and Sirohi higher percentage (70% to 85%) of accounts were opened during 2014 to Contrary to this, in Dausa and Tonk districts, 34% to 39% of accounts were opened during 2014 to 2016, while 60% to 65% of the accounts were opened before Considering accounts opened under government programs in various districts, Barmer, Nagaur and Pali have 79% to 86% of Year % Increase of accounts of females over males Table 15: Comparison of accounts opened based on gender the accounts opened under Jandhan yojana and Bhamashah yojana. In Barmer 80% of accounts were opened after 2014 under Bhamashah and Jandhan yojana. In Banswara, 45% of the accounts were opened under Jandhan yojana and Bhamashah after Till the year 2013, number of accounts opened by males outnumbered those opened by females. While the difference was 66.4% between 1980 and 2003, it reduced to 27.4% between 2004 and From the year 2014 onwards, due to implementation of programs such as Bhamashah, which aims at empowering women by facilitating opening of their accounts and transfer of benefits, number of accounts of females increased. In the year 2014, number of accounts of females increased by 15.6% over those of males, which increased to 18.6% in 2015 and 11.6% in

15 There seems to be gender equality as far as accounts that have been opened under Jandhan, NREGA, Pension and scholarship. More number of pension accounts (56.96%) has been opened for females. In NREGA, more or less equal number of Male Female accounts has been opened for males and females. In scholarship accounts however, more 54.4 number of males 50.5 (57.3%) have opened accounts. Jandhan NREGA Pension Scholarship Figure 3: Percentage of accounts opened by male and female c. Purpose for opening of bank accounts: Saving Loan Benefit transfer Remittance Others 0% 1% 31% 64% 4% Table 16: Purpose for bank account opening purpose of remittance. Around 64% of accounts have been opened for transfer of benefits such as scholarship, pension, wages etc. Around 31% of the accounts have been opened for the purpose of savings and a small percentage (3.79%) has been opened for securing loans from banks. A very small percentage (0.15%) has been opened for the 15

16 Saving Loan Benefit transfer Remittance Alwar Barmer Banswara Dausa Jaisalmer Naguar Pali Shri ganga nagar Sirohi Tonk Table 17: Purpose for opening of accounts - District wise Taking in to consideration purposes for which people from various districts have opened accounts, a large majority (85% Male Female 81 to 97%) of accounts have been opened for benefit transfer and savings purposes. Banswara district has highest (85%) number 18 7 of accounts that were opened for benefit transfer alone. Taking in Saving Loan Benefit transfer Remittance Others to consideration purpose for which accounts have been Table 18: Account purpose based on gender 49% of males have opened accounts for benefit transfer and 43% have opened for savings purposes. With respect to women, majority (81%) of them have opened accounts for benefit transfer and only 18% of them have opened accounts for savings purposes. d. Member accounts in various Banks: State Bank of Bikaner and Jaipur is the most popular bank with 33.46% accounts, followed by Rajasthan Marudhara gramin opened by males and females, S. No Bank % 1 State Bank of Bikaner and Jaipur Rajasthan Marudhara Gramin Bank Baroda Rajasthan Kshetriya Gramin Bank Punjab National Bank Bank of Baroda State Bank of India Oriental Bank of Commerce Indian Overseas Bank UCO bank Cooperative Banks Other banks 4.60 Total Table 19: Most preferred banks 16

17 bank with 17.78% accounts. All the gramin banks put together have 27.40% of the total accounts. State bank and its associate bank SBBJ have around 40% of total Male Female accounts. 38 In terms of preference of various banks for men and women in terms of opening a bank account, the difference is very small. Men seem to prefer SBBJ with 38% of men opening account in this bank, while 32% of women have an account with this bank. Women on the other hand prefer gramin banks with greater percentage of women (33%) having accounts in gramin banks when compared to 26% of men. e. Avenues for saving: Banks and SHGs are the most popular avenues for saving and monthly to quarterly is the most popular frequency for saving. 93% of the households save in various financial institutions that provide savings as one of their services. Around 46% of the households save exclusively in banks, 8% in SHGs and 26% of the households save in banks and SHGs as well. Most of the savings in banks are done on a monthly and quarterly basis, while those in SHGs are done on a monthly basis. Also, savings are taken up on a monthly basis by 39% of the households and on a quarterly basis by 16% of them Figure 4: Preference of banks among men and women # Institution Monthly Quarterly Half yearly Annually Others Total 1 Bank SHG Bank and SHG Cooperative Bank and cooperative Post office Bank and Post office NBFC Chit fund Other Total Table 20: Periodicity of savings in various institutions (percentage) Around 85% of the households save with the help of a pay in slip in a bank branch, whereas, 2.8% use the services of a BC agent. Rest of the account holders utilizes both 17

18 the entities for depositing their savings. Around 46% of the account holders have ATM facility. Though banks are available in only 28% of the villages studied, 80% of the households deposit their savings in banks directly. Village Services used for deposit of savings Bank Bank +BC agent BC agent With bank Without bank Table 21: Utilization of services of BC agent in villages with and without banks When villages with bank branch are compared with those with out bank branches, percentage of households who use services of BC agents both exclusively and along with banks improved significantly. In case of villages without banks, households dependent on BC agent was 3.7% when compared to 0.56% in villages with banks. Similarly, percentage of households dependent on both bank and BC agent increased from 1.3% in villages with banks to 16.5% in villages without banks. Bank branch Both BC agent Alwar Barmer Banswara Dausa Jaisalmer Naguar Pali Shriganga nagar Sirohi Tonk Table 22: Utilization of services of banks and BC agents for savings - district wise In districts such as Alwar, Jaisalmer and Nagore, almost all the savings transactions happen through bank branch. Though in fairly limited manner, account holders in Pali, Sirohi, Barmer, Dausa and Banswara, people are dependent on BC agents (exclusively) as well. In districts such as Banswara, Barmer, Shriganganagar and Tonk, account holders use the bank branch as well as BC agent for savings transactions. 18

19 f. Withdrawal of amount deposited in bank: Withdrawal of amount from the bank using withdrawal slip is the most popular method with 62.1% of respondents resorting to the same, followed by both bank slip and ATM in nearly 30% of the respondents. ATM does not seem to be the most popularmethod for withdrawal of amount from bank as only 2.5% of the respondents are using ATMs alone for withdrawal of amount. Taking in to consideration district wise data, withdrawal of money through bank slip and ATM are the most popular methods. Withdrawal through bank branch is popular S. No Withdrawal source Percent 1 Bank slip Bank slip and ATM ATM only Bank slip and checkbook Bank slip, checkbook and ATM Cheque book Others 1.5 Total Table 23: Avenues for withdrawal of money from bank among 75% to 85% of the account holders in Jaisalmer, Nagaur and Pali districts. In these districts, withdrawal of money through ATMs (as well as bank branch) does not seem to be so popular and ranges from 10% to 21%. In districts such as Alwar, Dausa, Shriganganagar and Tonk, usage of ATMs (along with bank branch) seems to be popular with nearly 40% of account holders dependent on ATM in addition to bank for withdrawal. Bank branch Bank branch and ATM Bank branch and Checkbook Bank branch, checkbook and ATM Checkbook Other combinations Alwar Barmer Banswara Dausa Jaisalmer Naguar Pali Shri Ganga Nagar Sirohi Tonk Table 24: Methods used for withdrawal of money from banks - district wise g. Points of transaction: With respect to various points in which banking transactions are done by the household members, banking transaction with pay in and withdrawal slips are popular among 58.40% of households. In 22.06% of households, bank branch and ATM are equally 19

20 popular. BC agents (exclusively) are engaged by only 1.05% of the households. In 7.01% of the cases, respondents either use the services of BC exclusively or along with other options. Hence usage of bank pay in slips and ATM are the most popular points for transacting with banks. S. No Banking services used by household % 1 Bank branch- pay in/withdrawal slip Bank branch and ATM Bank branch and BC agent Other combinations that include a BC agent ATM only Bank branch and cheque book Bank branch, Cheque book, ATM BC agent Other combinations 1.95 Table 25: Banking services used by household h. Availability of Kisan Credit Cards: Land category % of HHs with KCC Marginal Small Semi medium Medium Total Table 26: Availability of KCCs Around 23% of the households have Kisan Credit Card. Though more than 60% of small, semi medium and medium farmers hold Kisan Credit Cards, only 22.13% of marginal farmers (who happen to be 87% of the farmers in the sample) hold Kisan Credit Card. Hence higher number of semi medium and medium farmers hold KCC when compared to marginal farmers Alwar Barmer Banswara Dausa Jaisalmer Naguar Pali Shriganga nagar Sirohi Tonk Table 27: District wise availability of Kisan Credit Cards Banswara has the highest number of households with Kisan Credit Cards, followed by Tonk and Barmer. Pali district has the least number of households with KCCs. i. Loan outstanding with various agencies: District Banks SHGs MFIs Cooperative Friends/family Money lenders PHL* ALO** PHL ALO PHL ALO PHL ALO PHL ALO PHL ALO 20

21 Alwar Barmer Banswara Dausa Jaisalmer Naguar Pali Shri ganga nagar Sirohi Tonk Total Table 28 Percentage of loan outstanding with different agencies - district wise *Percentage of Households (total) with Loans, **Average Loan outstanding A total of 80.5% of households have loans outstanding with various agencies. Around 43% of the households have taken loans from formal agencies such as banks, SHGs, MFIS and cooperatives, while 37% have taken loans from District HHs with loan outstanding informal sources such as moneylenders and friends. Among (As % of HHs those households with loan outstanding, 78.27% of in district) households have taken loan from one source, 23.49% from two sources, 4% from three sources and 0.1% from four sources. Average loan outstanding for households who took loans from banks is nearly 1.13 lakhs, which is the highest Alwar Barmer Banswara Dausa among all the agencies issuing loans followed by Jaisalmer 51 cooperatives with average loan outstanding of Rs. 90,660. SHGs and MFIs are the other formal sources of funding; the average loan outstanding is very low. However, moneylenders, friends and family who are the informal sources of credit have higher average loan outstanding of Rs. 87,254 and Rs respectively indicating higher need for credit by various households and the inability/inaccessibility of formal agencies to cater to the same. Naguar 92 Pali 97 Shriganga nagar 3 Sirohi 48 Tonk 74 Table 29: Loans outstanding - As percentage of households in various districts Taking in to consideration district wise data, Barmer and Dausa are the only districts with more than one loan per household. These districts respectively have 1.7 and 1.4 loans per household. A large percentage of household in Banswara (43% of the total households studied in the district) have loans outstanding with SHGs. Except for another 1% of the households studied in the district having outstanding with banks, households in this district do not have loans outstanding with other agencies. Similar is the case with Shri Ganganagar, wherein except for 2% of the households, which have loans outstanding with banks, no other household has any loan outstanding. 21

22 District NREGA Pension Gas Jandhan Bhamashah Scholarship subsidy Alwar Barmer Banswara Dausa Jaisalmer Naguar Pali Shri Ganga nagar Sirohi Tonk Total (%) Table 30: Benefits availed under various schemes (As percentage of total number of households studied) transfer: j. Benefit Around 65% of households have accessed NREGA payment through bank accounts and 42% of households have availed subsidy for gas cylinders. Benefits provided under Bhamashah scheme were availed by 44% of the households and pension was availed by 24% of the households. Almost all the households studied in Banswara have availed payments under NREGA and have accessed benefits under Bhamashah scheme. Similar is the case with Barmer, wherein all the households have availed payment sunder NREGA. k. Insurance: Overall, 24.2% of the account holders have used insurance service provided by banks. In Barmer district, 46.5% of the households have accessed insurance, followed by Dausa district wherein 44% of the households have accessed the service. In Banswara, the least number of households have accessed insurance service. S. No District HH (%) S. No District HH(%) 1 Alwar Naguar Barmer Pali Banswara Shri Ganga nagar Dausa Sirohi Jaisalmer Tonk 27.0 Total 24.2 Table 31: Insurance service availed by households in various districts (as % of households per district) 10. Conclusion: Only 28% of the villages studied had banks. In villages with less than 2000 population, only 15%9 had banks. Similarly, in case of villages with population10 and more than 10,000 population, 34% and 83% of the total villages had banks (respectively). In 29% of the villages studied, there was no bank branch either within the 9 as percent of total villages in that particular category 10 Population as quoted by the respondents 22

23 village or within five kilometers from the village. Similarly, 9% of the total villages studied do not have any bank branch within their village or within ten kilometers from their village. It is to be noted that 11% of the villages, which do not have any bank branch within 10km from their village, have more than 10,000 residents. Hence not all villages with more than 10,000 populations have banks in the state. Also, there are differences in terms of banking infrastructure across the geographical regions. Irrespective of population of the villages, none of the villages studied in Barmer and Sirohi had banks. On the contrary, districts such as Pali and Dausa, have the highest (75% and 67% respectively) number of villages with banks. Hence, availability of banks is highly variable based on the geographical and other related aspects of the district and the state does not seem to maintain uniformity in this regard. In villages without a bank branch with in five-kilometer radius, 7% have post offices within the village and 55% of them have post offices within five kilometers from their village. Almost all the households (99.06%) have opened at least one account with a bank. In 56% of the households, all adult hold bank accounts. In spite of unavailability of banks in all the villages, all the districts have more than one account per household. Dausa district has 2.6 accounts per household, which is the highest, and Pali and Sirohi have only 1.3 accounts per household and are at the bottom of the list. The financial inclusion program of government of India started in the year 2004 and even after ten years of implementation, only 43% accounts were opened. However, after Bhamashah was introduced in the year 2014 along with Pradhan Mantri Jan Dhan yojana, 57% of accounts have been opened between 2014 and Women own 48% of the total account opened and hence display gender balance. In Alwar, Pali and Sirohi districts accounts opened by females are 20% higher than those opened by males. In Banswara, accounts opened by males and females are almost equal, while in rest of the districts, accounts opened by females are lesser than those opened by males by 10% to 30%. Till the year 2013, number of accounts opened by males outnumbered those opened by females. While the difference was 66.4% between 1980 and 2003, it reduced to 27.4% between 2004 and From the year 2014 onwards, due to implementation of programs such as Bhamashah, number of accounts of females increased. In the year 2014, number of accounts of females increased by 15.6% over those of males, which increased to 18.6% in 2015 and to 11.6% in There seems to be gender equality as far as accounts that have been opened under Jandhan, NREGA, Pension and scholarship. More number of pension accounts (56.96%) has been opened for females. In NREGA, more or less equal number of accounts has been opened for males and females. In scholarship accounts however, more number of males (57.3%) have opened accounts 23

24 A large percentage (64%) of accounts have been opened for transfer of benefits such as scholarship, pension, wages etc. Around 31% of the accounts have been opened for the purpose of savings and a small percentage (3.79%) has been opened for securing loans from banks. State Bank of Bikaner and Jaipur is the most popular bank with 33.46% accounts, followed by Rajasthan Marudhara gramin bank with 17.78% accounts. Banks and SHGs are the most popular avenues for saving and monthly to quarterly is the most popular frequency for saving. 93% of the households save in various financial institutions that provide savings as one of their services. Around 46% of the households save exclusively in banks, 8% in SHGs and 26% of the households save in banks and SHGs as well. Around 85% of the households save with the help of a pay in slip in a bank branch, whereas, 2.8% use the services of a BC agent. Rest of the account holders utilizes both the entities for depositing their savings. Around 46% of the account holders have ATM facility. Though banks are available in only 28% of the villages studied, 80% of the households deposit their savings in banks directly. Availing services of BC agents is slightly higher in villages without banks. In case of villages without banks, households dependent on BC agent was 3.7% when compared to 0.56% in villages with banks. Similarly, percentage of households dependent on both bank and BC agent increased from 1.3% in villages with banks to 16.5% in villages without banks. Withdrawal of amount from the bank using withdrawal slip is the most popular method with 62.1% of respondents resorting to the same, followed by both bank slip and ATM in nearly 30% of the respondents. ATM does not seem to be the most popular method for withdrawal of amount from bank as only 2.5% of the respondents are using ATMs alone for withdrawal of amount. Around 23% of the households have Kisan Credit Card. Though more than 60% of small, semi medium and medium farmers hold Kisan Credit Cards, only 22.13% of marginal farmers (who happen to be 87% of the farmers in the sample) hold Kisan Credit Card. Hence higher number of semi medium and medium farmers hold KCC when compared to marginal farmers. A total of 80.5% of households have loans outstanding with various agencies. Around 43% of the households have taken loans from formal agencies such as banks, SHGs, MFIs and cooperatives, while 37% have taken loans from informal sources such as moneylenders and friends. Amount outstanding with friends, family and money lenders 24

25 is as high as Rs.80,000 indicating high level of credit need that could not be met by formal financial agencies. 25

26 11. Annexure Annexure-1: District wise samples collected S. No District No of samples % 1 Alwar Barmer Banswara Dausa Jaisalmer Nagaur Pali Shriganganaga r 9 Sirohi Tonk Total

27 Annexure-2: Village wise samples S. No Village Frequency Percent 1 10/8 SHPD SD AALURA AFARI KHERA BAPI BARAGAON BASANTGHAR BHAWTA BHIKHODAI BHIMANA BIJAPUR BIMRA BIRMANA BISALPUR CHAINPURA CHEEBI CHHOTA RUJIYA CHOMA CHOROHI PAHARI DANPURA Dharmpur DIDANIYA DUTTWASS GANESH PURA GANGAPUR GHARAT GHATIYA GHEGHOLI GORIYA