For many poor people, finding a way out of poverty is limited by their inability to borrow or save money. Financial services have failed to adequately reach poorer populations for a number of reasons, including inadequate infrastructure, perception that lending to the poor is too risky to be commercially viable, inhibiting regulatory and legal environments, and limited understanding and awareness of financial services by the poor.

Over two-thirds of micro finance clients around the world are women. The strong participation of women in microfinance programmes can be attributed to a number of factors. Women borrowers tend to have higher repayment rates relative to men, and evidence suggests that when women are provided with access to finance, the whole household benefits, not just the individual client. Furthermore, targeting women is recognised as an effective mechanism to improve gender equality within communities. Financial inclusion can enable women to diversify their income flows, accumulate assets and increase their economic activity. Women with access to formal banking system can have greater control over their incomes and more power in household decision making.

Through financial literacy programme, women often gain new vocational skills, self-confidence and greater leadership, resulting in an enhanced ability to drive change within the household as well as the community.

Financial inclusion means delivery of a range of financial services to the poor and the disadvantaged. It is increasingly being seen an important aspect of feeorts towards for poverty reduction and achievement of Millennium Development Goals (MDGs).

Moreover, financial inclusion emphasises the importance of creating an appropriate enabling environment to facilitate the provision of financial services to the poor.

NABARD, a leading development bank, and Development Alternatives organised a financial literacy programme among women under a self help course in the rural area of Jhansi district of Uttar Pradesh in 2009. Under this programme, up to 2,000 women and men in over 20 villages were trained on managing their personal finances, budget money, prioritisation, making a savings plan and taking advantage of the bank to achieve their family goals. The financial literacy training was delivered to complement the Local Sarv U.P. Grameen Bank services which has opened around 600 savings accounts.

"I am very happy that the financial literacy training and rural banking was brought to our doorsteps," said Dhankuar, a women’s self help group (SHG) member from village Rundra Karari, Jhansi district.

The training took place in the village and was conducted in vernacular by a trained facilitator. Each workshop was scheduled to fit into the daily routine of the community to allow maximum participation.

"It has helped us save money and make all these improvements to our home and farm that I’ve wanted to do for a long time," said Ramvati, a villager from Gopalpura, Jhansi. Ramvati attended the financial literacy training in 2009 and opened a rural banking account. By March 2011 she had enough savings to change the roof of her house.

Success of Ramvati and Dhankuar has inspired other women group members too. At present many of the 250 SHGs, comprising more than 2,000 women as members, manage their money better, have rural savings accounts and have progressively made improvements to their lives.

Financial inclusion has become a buzzword now, but in rural area it has been practiced for quite some time. The Reserve Bank of India has been putting efforts to make commercial banks open branches in rural areas. Priority sector lending was instituted to provide loans to small and medium enterprises and agricultural sector. Further, special banks were set up for rural areas like the Rural Cooperative Banks and the Regional Rural Banks. The government also set up national level institutions like National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI) to empower credit to rural areas and small and medium enterprises (SMEs).

Despite the rural policy-push, majority of the population continues to be financially excluded. The nature, scope and cost of services has been monitored by the apex bank whether there is any denial, implicit or explicit, of basic banking services to the common person. Banks are urged to review their existing practices to align them with the objective of financial inclusion.