CONTRIBUTION OF SMALL FINANCE BANK TO THE INCLUSIVE GROWTH OF ECONOMY

Abstract

Currently, it is estimated that over 2.5 billion people worldwide lack access to financial services, with India accounting for one third of this figure. Despite this expansion of banking's reach and scope, there is still a great need for financial services. In India, one kind of specialty bank is called a Small Finance Bank (SFB). These banks seek to bring financial inclusion to segments of the economy that are not currently covered by other banks, including unorganized sector entities, small and marginal farmers, small and micro businesses, and small and micro industries. SFB, the banking division established by the Reserve Bank of India with the Government of India's approval, aims to increase financial inclusion. This suggested technique outlines how SFBs contribute to economic progress and how they help the underprivileged and illiterate become more financially included. Based on secondary data, the current study is analytical and descriptive in character. The study comes to the conclusion that small finance banks are growing at an incredible rate and that this is good for the economy. By making banking services easily accessible to the general public and assisting in the expansion of banking services to unbanked rural areas, it promotes financial inclusion.