Medici examines the widening financial gap in India and their lack of push for institutional credit for consumers. With consumer debt to GDP at only 17 percent, India falls behind major economies of Asia Pacific.
According to the article, “In the absence of institutional credit at fair interest rates for a majority of the population, people at the bottom of the pyramid are left devoid of opportunities and fail to be included in the financial system.”
Key contributing factors to this issue of financial inclusion include:
- Challenges in financial inclusion
- Informal nature of economy
- Credit bureau coverage and thin file cases
- Inadequate infrastructure
- Weak contract enforcement