Financial inclusion—providing everyone access to financial services and products—is a win-win situation for all stakeholders. The theory behind it is multifaceted. From the point of view of the economy, its implications on development are well known. Many growth theories have implied its practice as a prerequisite for economic development (Schumpeter, 1912; and Hicks, 1969). Most development planners have also advocated it in one form or the other. Economic leaders believe that financial inclusion creates economic opportunities that bring hitherto excluded people into the economic mainstream (Bindu and Jain, 2011). It transfers resources from the resource surplus to the resource deficit units (Bihari, 2011; and Sajeev and Thangavel, 2012) leading to inclusive, sustained and balanced growth. From the point of view of the society, financial inclusion provides vital social benefits (Karlan, 2014). It helps reduce poverty (Beck
et al., 2007; and Ktona and Ninka, 2013) and insulates people from unanticipated financial shocks (Shetty and Veerashekharappa, 2009; and Lokhande, 2011). Its welfare effects allow people to effectively manage their lives and livelihoods. At the micro level, this alters the financial landscape of the poor and at the macro level, the economic landscape of the country.
On the other side, financial exclusion aggravates social inequality and poverty
(Raman, 2012). The poor outreach of financial services discourages savings and creates dependency on expensive credit provided by non-formal moneylenders (Goyal, 2008).