Financial Inclusion Schemes in India

The government has launched many financial inclusion schemes in India. These schemes have helped the population enhance their financial conditions and have also contributed to the economy.

To know more about financial inclusion in India, read ahead. 

What is Financial Inclusion?

If you are searching for ‘financial inclusion meaning’, you’ve come to the right place. Financial inclusion is all about offering financial solutions to the people in our society who might be excluded from mainstream banking products.

It aims to bring basic services like savings, credit, insurance, etc to the economically underprivileged groups of our society. These services are aimed towards women, rural population, marginalized farmers, or even urban slum dwellers. 

Top Financial Inclusion Schemes in India

Post independence, the government of India has launched many financial inclusion schemes. Here are a few of them - 

• Stand Up India Scheme

• Pradhan Mantri Suraksha Bima Yojana (PMSBY)

• Sukanya Samriddhi Yojana (SSY)

• Pradhan Mantri Jan Dhan Yojana (PMJDY)

• Pradhan Mantri Mudra Yojana (PMMY)

• Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

• Atal Pension Yojana (APY)

The following section will look briefly at these financial inclusion schemes in India. 

1. Stand Up India Scheme

The Stand Up India scheme was launched on 5 April 2016 to provide entrepreneurs with funds to start their new businesses. This scheme is run under the Small Industries Development Bank of India (SIDBI).

Features

Some features of this scheme are as follows - 

• This scheme is for financing businesses by SC/ST or women entrepreneurs

• At least 1 such loan should be given out from each bank branch

• In case the enterprise has multiple owners, at least 51% of the shareholders should be of the mentioned category

• It is a composite loan, inclusive of term loan and working capital

Benefits

The benefits of this financial inclusion scheme are mentioned below - 

• Loans between Rs.1 Lakh and Rs.10 Crore can be availed 

• New businesses can avail loans

• Rate of interest is not to exceed the lowest applicable rate for that category

• Loan can be repaid in 7 years with a maximum moratorium of 18 months

2. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

This scheme was launched in the year 2015 to provide an insurance policy as well as a financial aid for everyone.

Features

Here are some of the top features of this scheme - 

• People between the ages of 18 to 70 are covered 

• Candidate must have a savings bank account in any bank

• It only covers death by means of accident

• This scheme can be availed from any private or government bank, insurance agent, internet banking, or post office

• Rs.20 needs to be deposited every year into this scheme

Benefits

The benefits under the PMSBY are as follows -

• In case of death of the account holder by accident, the nominee will get Rs.2 Lakh

• In case of accident and total disability, the nominee will get Rs.2 Lakh

• In case of partial disability due to accident, the nominee will get Rs.1 Lakh  

3. Sukanya Samriddhi Yojana (SSY)

On 22 January 2015, Prime Minister Narendra Modi introduced the Sukanya Samriddhi Yojana. This scheme was launched under the ‘Beti Bachao, Beti Padhao’ campaign. 

Features

The features of the Sukanya Samridhhi Yojana are listed here - 

• One account can be opened per girl child; in case there are two girls in a family, a maximum of two accounts can be opened 

• If the first or second delivery brings twins or triplets, a third account can be opened

• At the time of opening the account, the age of the child should be below 10

• During one financial year, a minimum of Rs.250 and a maximum of Rs.1.5 Lakh can be deposited in each account

• The maturity period is 21 years from the date of account opening

• Money can be deposited for a maximum of 15 years from the date of opening the account

• A birth certificate must be submitted while opening the account

Benefits

There are many advantages for girls under this scheme. Some important benefits are -

• This scheme provides an 8% interest rate and income tax advantages

• You can withdraw up to 50% of the balance, in case you need it for higher educational needs of the child after she turns 18 years of age 

• The account can be prematurely closed only in case of death of a parent or guardian. In such a case the money deposited will be transferred to the child or another guardian along with interest

• You can get tax benefits under Section 80C

• You can transfer the account from the post office to an authorized bank or from one authorized bank to another anywhere in the country

4. Pradhan Mantri Jan Dhan Yojana (PMJDY)

On 15 August 2014, the Indian Government introduced the Pradhan Mantri Jan Dhan Yojana. This scheme offers easy access to financial solutions like need based credit, remittance, pension, insurance, and basic savings bank accounts to all households in the country.

Features

The major features of the Pradhan Mantri Jan Dhan Yojana are -

• A basic savings bank account is opened for a person who is unbanked

• No minimum balance required in the bank account opened under this scheme

Benefits

Opening a bank account under the PMJDY comes with multiple benefits. Some of them are -

• You can earn interest on the amount deposited in these accounts

• An accident cover of Rs.2 Lakh is available with RuPay cards issued to accounts that are opened after 28 August 2018 (the amount will be Rs.1 Lakh for accounts opened before the date)

• An Overdraft (OD) facility of Rs.10,000 is available for accounts that have been running for at least 6 months

• Accounts under this scheme are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), and Micro Units Development & Refinance Agency Bank (MUDRA) scheme

5. Pradhan Mantri Mudra Yojana (PMMY)

This scheme was launched on 8 April 2015 by the government of India to provide loans to non-farm and non-corporate entities. Under this scheme unsecured loans under Rs.10 Lakh are provided to micro and small enterprises. 

The funds of the Mudra loans are classified into 3 broad categories -

• Shishu – This category covers loans up to Rs.50,000. 

• Kishor – This category covers loan amounts between Rs.50,000 and Rs.5 Lakh. 

• Tarun – This category covers loans from Rs.5 Lakh to Rs.10 Lakh.

Features

The top features of the PMMY are -

• Loans can be taken by professionals who use tillers, tractors, and two-wheelers for commercial jobs 

• Applies to agri-allied non-farm income-producing professions like bee-keeping, poultry farming, pisciculture, etc 

• Vendors, traders, shopkeepers, and others engaged in the service sector can apply for business loans

• Working capital loans and equipment loans are also covered 

Benefits

The major benefits of taking a loan under this scheme are -

• You can get unsecured loans at low interest rates

• Great for micro and small businesses for purchasing machinery and plants, working capital need, remodeling workspaces, etc.

• The loan payback tenure can be as high as 7 years

• Offers Rural Business Credit (RBC) as working capital loans and Business Loans Group Loans (BLG) as Dropline Overdraft Facility

6. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

This financial scheme was launched on 9 May, 2015. It’s a renewable insurance scheme that provides life insurance coverage of Rs.2 Lakh.

Features

Take a look at these features of the PMJJBY financial inclusion scheme in India - 

• Candidate’s age must be between 18 and 50 and they should have a savings bank account

• Candidate’s Aadhaar card and mobile number must be linked to their bank account

• This scheme can be availed from any bank account, post office, or public insurance agency in India

Benefits

This scheme comes with many benefits which are listed below - 

• No medical tests are necessary to start an account 

• Life insurance cover of Rs.2 Lakh is available at only rs.436 per year

• The nominee can reap the benefits of the scheme in case of death of the account holder

• The insurance cover is for 1 year and it can be renewed every year

• It covers death for whatsoever reason

7. Atal Pension Yojana (APY)

This voluntary financial scheme was launched in 2015 for helping people who work in the unorganized sector to get a regular income after they retire. The Pension Fund Regulatory & Development Authority (PFRDA) handles all operations of this scheme.

Features

Here are some features of the APY - 

• This account can be opened in a private or government bank, or in a post office

• The Government of India co-contributes towards this financial scheme

• People will start getting pensions when they turn 60 years of age

• People who pay a tax cannot open an account under this scheme

Benefits

The benefits of this scheme are listed below - 

• You can choose to get a fixed pension of rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, or Rs.5,000 after your retirement

• Every bank account holder can join this scheme

• In case of candidate’s death during the scheme, their spouse can complete the duration and claim the benefits

• Offers tax benefits

Few most common financial inclusion schemes were discussed here. The financial schemes in India are launched by the government in order to strengthen the accessibility of economic resources and increase the savings of all sections of the society. 

These schemes bring banking, insurance policies, as well as credit options to the group of people who often stay unbanked. People can reap the benefits of these schemes with low investment and documentation. The requirements are minimal which helps the majority of the population.