Financial Inclusion: A tool

to defend the Human

Rights

Flt Lt (Dr.) Renu Lamba

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 Human Rights
Human rights (as stated in the preamble of UDHR 1948)
are the supreme, inherent, and inalienable rights to life, to
dignity, and to self-development.
They are defined and established in more than 80
international legal instruments  

HUMAN RIGHTS ARE THE MAJOR OBJECTIVES OF

ANY WELFARE STATE.

 https://www.un.org/en/universal-declaration-human-rights/

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In this paper we will focus on the following
two articles of the UDHR 1948
Article 25. Right to Adequate Living Standard Everyone has the right to a

standard of living adequate for the health and well-being of himself and of his
family, including food, clothing, housing and medical care and necessary social
services, and the right to security in the event of unemployment, sickness,
disability, widowhood, old age or other lack of livelihood in circumstances
beyond his control.
Article 1. Right to Equality All human beings are born free and equal in

dignity and rights. They are endowed with reason and conscience and should
act towards one another in a spirit of brotherhood.
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In modern capitalist society, if one is
considering equality in access to quality
food, shelter and health MONEY acts as an
equalizer. 

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Financial Inclusion & Microfinance
Financial inclusion may be defined ‘as the process of ensuring
access to formal financial services, timely and adequate credit
where needed by vulnerable groups such as the weaker sections
and low income groups at an affordable cost’ (Rangarajan
Committee, 2008)
Microfinance involves the provision of financial services such
as savings, loans, insurance etc to poor people living in both
urban and rural settings who are unable to obtain such services
from the formal financial sector.

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 World Bank Global Findex Report 2017
India witnessed a great jump in the account ownership
during 2014-2017 as 80 percent Indians own a bank
account today as compared to only 35 percent bank
account holders in 2011. This notable increase in the bank
account ownership in India is attributed it to the Pradhan
Mantri Jan Dhan Yojana
Despite having a relatively high account ownership, India
claims a large share of the global unbanked population,
after China. Over 190 million Indian adults still do not
have a bank account. 

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In the absence of formal financial institutions,
people have no choice but to look forward to
informal credit sources which make sure that
an individual does not come out of the vicious
cycle of poverty.

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 Muhammad Yunus

“POVERTY IS THE ABSENCE

OF ALL HUMAN RIGHTS.”

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Conclusion1
And thus it can be seen that there is strong linkage
between Financial Inclusion and the Fundamental
human Rights of right to food , housing and shelter

It is understood that the inclusive growth can sustainably

coexist with social justice only when we focus on
financial inclusion

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Case Study to defend the point2
A woman stands in the sun for five hours, her baby strapped to her back.
There’s no water or shade. The baby’s head lolls, as it becomes increasingly
dehydrated. This woman has no choice but to stand in the queue 
Visiting a bank in a big city like Chandigarh, may not be a painful exercise.
There is an ATM in every locality. But, the situation is completely different
for any gram panchayat, may be just 100 km away from the city. There may
be only one bank and a non functional ATM or not even that. In order to
avail the banking services, customers get into a queue even before the bank
opens. The guard in front of the gate tries to manage the crowd like a herd
of sheep.
Getting inside the bank is like getting an access to the sacred shrine where
bank officials act like they are God. A warning is displayed for the
customers to behave properly or else punitive action can be taken.

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Case Study to defend the point2
If harassment from bank officials was not enough,
Business correspondents (BCs) complement them by
exploiting the poor further. They take advantage of the
lack of information about consumer rights with those in
need. For a simple withdrawal transaction, BCs charge
additional amount which is no less than extortion.

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Case Study to defend the point2
Banks still think that the poor and the low income clients are an
empty market: unprofitable, uninteresting and a waste of time and
resources
It is because of such circumstances that a space has formed for loan
sharks (moneylenders) in the village, who charge an unreasonably
high interest rate along with one time principal repayment clause.
Though there has been a significant rise in the micro-credit
institutions in rural pockets of the country who claim to provide
loans at reasonable interest rates, they lack the basic sensitivity and
respect towards other people. Their objective is to increasing the size
of their portfolio and not the protection of customer rights.

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Conclusion 2
Dignity and autonomy, equality and non-discrimination,
inclusion of vulnerable groups, and a gender perspective
aren’t first and foremost on the minds of the financial
service providers and so It is important to remember that
the rationale for applying a human rights-based approach
is enshrined in international law

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Recomendations

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The service level innovation becomes essential in wake of
transformed rural economic realities and challenges, their
vulnerability.

 Effective market orientation to essentially incorporates

the needs and aspirations of the consumer

An effective training to the service providers is

highlyrecommended

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Limitations

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The study is limited to the review of the existing literature

Time Shortages was felt mainly during the case study

analysis , The target to complete the analysis

Human interaction and ability to seek information in

unbiased manner-Language barriers.

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Scope for future Research

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There is continuous change in the technological
environment, ICT, financial infrastructure & institutions,
etc, a research is very much warranted in developing
schools (to nurture young minds) for innovating a delivery
mechanism (of financial product) that suits culturally and
geographically diverse country like India

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Prospective contribution to existing
knowledge
Development of effective marketing and business orientation

Understanding rural needs- Customizing the products

Policy corrections are proposed

Generating inputs for academic debate resulting in developing

innovative methods to achieve Financial inclusion

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www.rbi.org.in
www.nabard.org
www.inclusion.in
www.responsiblecredit.net
http
://www.livemint.com/Politics/xziKtmtOxBJntZb41p2hDL/India-GDP-see
n-surging-74-in-data-that-has-puzzled-economi.html
 back
 
http://indiatoday.intoday.in/story/india-to-grow-at-7-8-per-cent-in-2016-
world-bank/1/564427.html
 back
 http://planningcommission.gov.in/reports/genrep/himanshu.pdf  back
 http://planningcommission.nic.in/reports/genrep/rep_hasim1701.pdf  
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Thankyou…..

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