Impact of Telecommunication on Financial Inclusion in India: Using Structural Equation Modeling

Abstract

Financial Inclusion is vital for abolition of poverty and boosting equality in the society. Telecommunication is emerging as a key driver for economic and social development in knowledge intensive global scenario. Telecom is playing a significant role in bringing financial services to remote areas and helping people to improve their livelihood.

Main objective of this study is to assess relation between telecom and financial inclusion in rural India. The sample size for the study is 200. The data is collected from two villages of Kaushambi district of Uttar Pradesh. The two dimensions namely, Financial Inclusion and telecom are considered for the study. There are 6 latent constructs and 44 indicators for the dimensions. The proposed Model has telecom as exogenous construct and financial inclusion as Dependent construct. Structural Equation Modeling (SEM) is being used for testing and developing the model using SmartPLs. There is evident positive impact of telecommunication on financial inclusion in case of several constructs.

Keywords: Financial Inclusion, Structure Equation Modeling, Telecommunication, Rural