Exploring the Role of RBI-Registered NBFCs in Financial Inclusion: An Empirical Study
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Abstract
This paper aims at identifying the contribution of RBI –registered NBFCs to the achievement of financial inclusion in India. Taking into account the opportunities and challenges posed by the NBFCs it has been observed that NBFCs have become effective providers of credit and financial services to the economically weaker, rural and semi urban sector. This research focuses on the role of these institutions in the financial inclusion process through an analysis of the lending procedures, and outreach programs that these institutions champion with regard to the effects they have had on the low income citizenry and small businesses. In evaluating the success of NBFCs in meeting credit demands and financial needs of the excluded people, the study also includes a comparative analysis of primary and secondary data. The paper provides further information regarding the NBFCs’ regulatory environment and the part it plays in their functioning. The study also reveals that NBFCs may significantly contribute to increasing financial inclusion both with lending products and delivery channels. However, issues like regulatory issues, risk factors, competition factors persist. The paper concludes by providing policy implications to enhance the position of NBFCs in enhancing the Financial inclusion as well as achieving sustainable economic development.