Determinants of Financial Inclusion of Urban Poor in India: An Empirical Analysis

31 Pages Posted: 9 Nov 2016

See all articles by Biswa N. Bhattacharyay

Biswa N. Bhattacharyay

Asian Development Bank; Asian Development Bank Institute; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 29, 2016


Financial inclusion is crucial for the inclusive and sustainable economic growth of developing countries. Access to financial services to all citizens, particularly to low income and poor people is a key to promote inclusive growth. While rural financial inclusion assumes importance from policy makers and academicians, urban financial inclusion needs urgent attention with rapidly increasing urbanization, unique requirements of urban population and increasing poor and low income population living in urban areas, particularly slum areas. The paper attempts to analyze the nature, characteristics and determinants of financial inclusion in Pune, a large city of India based on a household survey at an identified slum area. Empirical findings of the survey include the socioeconomic characteristics and banking behaviour of households Furthermore, the paper identifies the major determinants of the level of financial inclusion using a multiple regression model using socioeconomic characteristics of the households. Finally the paper suggests appropriate policies and strategies for enhancing financial inclusion in urban areas through building low cost personalized distribution network, creating asset linked and collateral free credit schemes, leveraging Aadhar (biometric identity card) platform, creating targeted product and service offering, strengthening business correspondent cells, and setting up urban financial inclusion centers.

Keywords: financial inclusion, urban poor, India, household survey and statistical analysis

JEL Classification: D010, D040, D140, G210, R200, C810

Suggested Citation

Bhattacharyay, Biswa Nath. and Bhattacharyay, Biswa Nath., Determinants of Financial Inclusion of Urban Poor in India: An Empirical Analysis (September 29, 2016). CESifo Working Paper Series No. 6096, Available at SSRN: or

Biswa Nath. Bhattacharyay (Contact Author)

Asian Development Bank ( email )

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