Madras Agricultural Journal
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December(10-12) 2022

Financial Inclusion through Self Help Groups – An Economic Catalyst to transform Rural India


                                This study attempted to create a comprehensive measure of Financial Inclusion (FI) with specific focus on SHGs among 33 major states in India from the period of 2016 to 2020. Principal Component Analysis was employed to track the status of inclusion in Indian financial sector. The link between FI and development indicators like agricultural and industrial growth, access to basic education was explored through Ordered Probit Random effect model using panel data. Results indicated that majority of Eastern and North Eastern states have poor FI, in addition Financial Inclusion Index (FII) showed a positive relation with agricultural growth.

Key words : Financial Inclusion Index; Self help groups; Principal Component Analysis; Ordered Probit Random effect model


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