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ABSTRACT
This article aims to investigate the factors that affect the usage of banking services in increasing financial inclusion in Pondicherry region. Purpose of opening bank account, easiness in accessing a bank's products, convenience, frequency of usage of banking services and physical distance of bank branch were examined to analyse whether these factors have an influence on usage of banking services. Analysis of primary data using factor analysis and multiple regression analysis was undertaken to understand the relationship between dependent variable (Usage frequency of banking services) and other independent variables. The results indicate that easiness in accessing bank products and purpose of opening bank account have significant influence on usage frequency of banking services. Physical distance of bank branch and convenience were not found to have significant impact on usage of banking services in this study. The methodology adopted in this study can be used for further empirical investigation in other regions in India.
Introduction
The banking industry has shown tremendous growth in branch penetration and ATMs penetration during the last few decades. It has achieved significant improvements in all the areas relating to financial feasibility, profitability and competitiveness. Despite these improvements, there are concerns that banks have not been able to include vast segment of the population, especially the underprivileged sections of the society, into the fold of basic banking services. Efforts are being made to study the causes of financial exclusion and design strategies to ensure financial inclusion of the poor and disadvantaged at the global level. The reasons may vary from country to country and hence the strategy could also vary but all efforts are being made as financial inclusion can truly lift the financial condition and standards of life of the poor and the disadvantaged (Leeladhar, 2005). The concept of financial inclusion has emerged as an important topic on the global agenda for sustainable long-term economic growth and is considered as a growing area of research interest for academicians, policy makers, financial institutions and governments in developing countries (Allen et al, 2012; Amidzicetal, 2014; Beck & Torre, 2006; Camara & Tuesta, 2014;).
Efforts are being made to enhance access to wide range of financial services at international levels. The World Bank's declared objective of achieving universal access by 2020...