India is considered as the fastest growing economy in the world and it happens to be the 4th largest as per the recent rankings. In this era of growth financial inclusion is considered to be the driving force behind the success of such progress. Inclusive growth is the mantra of today’s Economic India and the present study focuses on Holenarasipura Taluk of Hassan District in Karnataka. For the purpose of this study the Researcher has derived the data from both Commercial Banks as well as Self Help Groups located in Holenarasipura Taluk. Due to the efforts under taken by Central Government of India under Jan Dhan Yojana most of the rural families have now a Bank Account in their name and they are getting Government Benefits through DBT, that is, Direct Benefit Transfer.
This study examines the integrated role of formal banking institutions and Self-Help Groups in facilitating financial access and economic empowerment. The study is based on primary data collected from rural households and SHG members across selected Gram Panchayaths of Holenarasipura Taluk. Current Paper explores how Commercial Banks and Self-Help Groups interact through various mechanisms to access various Banking Services and mobilize savings. The studies before this have shown the significance role of SHGs in enhancing the financial inclusion and reducing the gap between formal banking and lower strata of the society. The study specifically emphasizes on women in Holenarasipura and their financial inclusion.
The study employs different statistical tools in the form of Descriptive Statistics, Correlation Analysis, Regression Models, Factor Analysis and Structural Equation Modelling (SEM) to understand the relationship between Banking Participation, SHG involvement and their Socio-Economic outcomes. The collaboration between Commercial Banks and SHGs positively influences the financial indicators such as, savings behavior, credit availability, and usage of insurance products, adoption of digital banking services and other financial inclusion services. Findings also exhibit that education, income level and digital awareness significantly influence the financial inclusion of the rural masses. The drawbacks of this system are identified as remote access to digital banking services, low financial literacy rates and procedural formalities are lagging in the rural areas.