Appraising Effect of Telecom Technology on Financial Inclusion in Select Villages of Bihar using Structural Equation Modeling

Abstract

Financial Inclusion is a one of the major realms of concern for the researchers and policy makers. Pradhan Mantri Jan Dhan Yojna (PMJDY) is a major step towards Financial Inclusion in India. This scheme has helped the marginalized section to own bank account but still miles to be achieved. The major concern now is to ensure usability of financial services. The Indian Telecommunication Industry is the fastest emerging industry. Telecommunication with its huge network is surfacing as crucial channel for launching new access techniques for banking services. This paper uses Structural Equation Modelling based software Smart PLS to examine the relationship between telecom and financial Inclusion. Data is collected randomly from two villages namely, Chaparia and Jagatpur of Madhubani District of Bihar. The sample size for the study is 200 with household as its sampling unit. The study includes 6 constructs and 44 indicators. All the 9 paths are statistically significant which shows significant relationship between the two dimensions, Financial Inclusion and Telecom. The financial institutes and telecom company have to play complementary role in achieving financial inclusion.

Keywords: Bihar, Financial Inclusion, Smart PLS, Structural Equation Modelling, Telecom