Have you ever thought about life with financial freedom or financial tools like money, credit card, and other monetary policies? We understand that this is a hypothetical situation, but in earlier days or ancient ages, it was the truth and reality at that time. Not all of us are rich; neither all of us belong to the middle class category.
Many poor people around the world need financial inclusion in the common society. In India, 6% of the total population (86.8 million) lies under the poverty category. Therefore, we will discuss why financial inclusion is important for this population category.
Importance of Financial Inclusion for the Poorest Civil Category
1. Household income
To run the livelihood on a daily basis, a regular income is required. Although for salaried or business class people, it seems a normal task. But the poorest section of the society hardly earns any income to run their lives. So, the government introduced a few short term employment schemes like MNREGA, which provides a guaranteed income of 100 days.
By using these financial schemes, they can plan to expand their financial assets. Also, they will gain enough income to manage household expenses so that their family could survive and manage all sorts of expenditures. Instead of selling assets in a time of crisis, it is better to spend the saved capital and save your assets for the future. Here, we are considering assets as property.
2. Money on a safer side
It is a fact that 1/5th of the developing nations use financial institutions like banks to keep their liquidity (cash) safe. Want to know where the rest of them keep? It is under floorboards or containers. Still, in Indian villages, many households follow this system to store their capital. Hence, it is the duty of the government that they must be aware of money management.
That is why in India, Pradhan Mantri Jan Dhan Yojna (PMJDY) was introduced, which opened many Indian bank accounts. As a result, financial transactions are now an easy task for every section of society. However, we would recommend that depositing the money in a trusted financial institution is necessary. If possible, try to invest also to gain the compounding growth of the capital. Statistics show, till March 2021, the tally of account holders under the PMJDY scheme reached 42 crores.
3. Build assets
Now, suppose you belong to the poorest section of the society, it is understood that the financial condition will be hand to mouth. Now, to enjoy financial freedom, it is essential to take credit and build your personal assets. In today’s date, hardly anyone could survive in a hand to mouth situation.
For them, there are several Important government schemes like low interest loans like Prime Minister Rozgaar Yojna (PMRY) launched in 1993. The main motive of this scheme is to provide a self-employable opportunity to lakhs of unemployed citizens. Apart from this, there are many others too which play a crucial role in developing personal financial assets.
4. Create jobs
If the economic cycle is continually moving, then the job opportunity will also increase. That is why the last reason that makes the financial inclusion of the poorest section is job creation. Even the poorest section of society has the right to earn and let others earn through their business.
Financial services are available that create entrepreneurship which indirectly creates job opportunities in the market. Just the problem is of awareness and knowledge. Lack of knowledge makes the poorest section of the society untouched by several welfare schemes.
So, this was all about financial inclusion. Hope you have got some vital information about the same.