Financial inclusion and training effectiveness: Farmers’ trammels in the Aspirational districts of Karnataka

Introduction

The Government of India identified 115 most backward districts and launched the "Transformation of Aspirational Districts" Programme in January 2018. The Aspirational district programme (ADP) mainly focus on measuring and improving the human development outcomes in these districts across five broad pillars-health and nutrition, education, agriculture and water resources, financial inclusion and skill development and basic infrastructure. The initiative aimed at bringing wide range of changes in all the sectors which will improve the living standards of the people living in these districts. Among the five thematical areas financial inclusion and skill development plays a major role in improving the income and living standards the people in the rural areas. According to Rangarajan (2008) [21] Financial inclusion is a process of guaranteeing access to financial services, timely and adequate credit needed by vulnerable groups at an affordable cost". The purpose is to provide a wide range of financial products and services across different distribution channels to the low-income earning individuals. Around 10 crore households in India lacked access to basic financial products and financial services (Khuntia, 2014) [10] . In India, 85.01% of operating land holding belongs to small and marginal farmers. The major barriers faced to serve the small and marginal farmers are lack of regular income, poverty and illiteracy (Kobba et al., 2020) [11] . In India, institutional sources accounts for only 21% of outstanding loan to marginal, small and medium farmer, whereas 79% of outstanding loan belong to the highest size (more than 10 ha.) land holders (NSSO, 2014) [16] . As a result, major percentage of marginal, small and medium farmers are still depending on the local or informal source for finance. A skilled workforce is always necessary to continue fastpaced growth and pull millions out of poverty. [17] . In agriculture sector only 18.5% of workforce is skilled, of which 0.5% have formal technical education (IAMR, 2013) [8] . Since, the inception of Aspirational Districts Program lot of efforts were taken by the government organizations, NGOs, ICAR institutes and state departments to improves the extent of financial inclusion and to organise effective training programs (Arun kumar et al., 2021) [1] . But the assessment report on aspirational district programme reported that financial inclusion and skill development requires a greater attention in the aspirational districts. Hence, the study was conducted to understand the major constraints of financial inclusion and effective training programs and also to seek suitable suggestions for the improvement of the farming communities in the aspirational districts. www.extensionjournal.com

Methodology

Two aspirational districts of Karnataka viz., Raichur and Yadgiri were selected purposively. Three training institutes which were actively providing skill-based trainings in agriculture sector were purposively selected from each district. Concerned head of all the six training institutes were contacted for the list of trainees who attended skill trainings from the inception of Aspirational Districts Programme. From the list of trainees, 60 farmers were selected from each district (total sample size is 120) through proportionate stratified random sampling method (for analysis of information related to financial inclusion). To ascertaining the constraints faced by the farmers related to financial inclusion and effectiveness of training programs a list of socio-personal, economical and technical constraints of financial inclusion, during and after training programs constraints were identified through literature and consultation with subject matter specialities. Similar procedure was also followed to identify the perceived suggestions. The schedule with list of constraints and suggestions was administered to the farmers and asked to give their response on three point continuums viz., most important, important and least important with the weightage 3, 2 and 1 respectively. Weighted mean score was calculated to rank the constraints and suggestions. The frequencies associated with each rating for each item were calculated, and the frequencies associated with each category were multiplied by the allotted scores and summed. The total for each factor was then divided by the total number of respondents. The weighted mean score for each aspect was determined in this manner.

Results and Discussion

Constraints related to financial inclusion

It is evident from the data presented in Table 1 that among the social-personal constraints listed 'lack of literacy on financial products and services' was considered as the most important constraint by most of the respondents with a weighted mean score of 2.366. 'Submission of witness' with a weighted mean score of 2.141. 'Lack of required documents' with a weighted mean score of 2.066 and the 'previous bad history' with weighted mean score of 1.650 and followed in respective order. Gwalani and Parkhi (2014) [6] also reported financial illiteracy was a main reason for lack of financial inclusion. Among the economic constraints 'low income and asset' was considered as the major constraint by most of the respondents with a weighted mean score of 2.258. 'High bank's charges' was considered as the second major constraint with a weighted mean score of 2.008 and 'Opening balance requirement and maintains of minimum balance' with a score of 1.866 followed in the respective order. Priyadarshini (2020) [18] reported insufficient income and lack of security were the major constraints among the respondents for financial inclusion. Rajasekar (2019) [22] and Nirmala and Muthuraman (2009) [15] reported that main constraints for financial exclusion in Madurai district were low income, no identity proof and previous bad history. Among the technical constraints 'banking procedures are cumbersome' was considered as the major constraint by most of the respondents with a weighted mean score of 2.491. 'Ease of availability of credit from non-institutional source' with a weighted mean score of 2.383. 'Delay in the loan approval' with a weighted mean score of 2.333. 'Nonavailability of financial institution in the village' had a score of 2.208 and 'unfriendly staffs in financial institutes' with a score of 2.150 followed in respective order. Gwalani and Parkhi (2014) [6] found unavailability of banking services and complex procedures were major reason for financial exclusion. [13] reported that lack of exposure visits and lack of practical demonstration were the major constraints of training programmes. Sahoo et al., (2023) [24] reported inadequate training as a major constraint. Purnima and Bhagyalakshmi (2022) [19] reported Inadequate practical learning and Lack of adequate scope for hands on learning as major training constraints. Kumari et al., (2005) [12] , Hill, www.extensionjournal.com and Coolbear, (2005) [7] , Das et al., (2014) [2] and Das (2019) [3] [20] , Gupta et al (2013) [5] , and Das (2019) [3] were also identified similar constraints.

Suggestions for increased effectiveness of financial inclusion and skill development training.

Out of all the suggestion from the table 3, 'financial institutes should simplify the banking procedures and processes' was considered as important suggestion by the most of the respondents with WMS of 2.40, 'establishing financial institutes in every village/locality' with WMS of 2.366, 'provision for awareness regarding usage of financial products and services' with a WMS of 2.183, 'Need of various financial literacy programmes by the financial institutes and government' with WMS of 2.141, 'Interest rate on loan should be reduced' with WMS of 2.041, 'Reducing the loan processing cost' and 'relaxation in loan security norms' with a score of 1.866 and 1.591 followed respectively. [25] and Jangid,et al (2012) [9] also suggested adequate funding to the trainees can help in creating basic infrastructure for starting enterprises or a venture. Rokonuzzaman, (2016) [23] and Dubey (2008) [4] suggested that the on-campus trainees have more favourable attitude than the off-campus trainees and increases the effectiveness of training programs. www.extensionjournal.com

Conclusion

Nowadays, financial inclusion of farming community is very critical to improve the saving habits, income and to take the advantage of different flagship programmes of GOI and an effective training programs were always a need of the hour to upscale the skills of individuals involved in agriculture sector of the aspirational districts. The study revealed that cumbersome procedures, ease of availability of credit from non-institutional sources and lack of financial literacy were the major constrains of financial inclusion. Lack of adequate hands-on training, lack of access to government benefits related to training areas and lack of adequate facilities for practical demonstration were the major reason for the reduced effectiveness of training programs. Hence simplifying the banking procedures and increase the number of financial institutes in the rural areas will improve the extent of financial inclusion. In case of training effectiveness proving financial supports after the training and mini kit facilities are necessary to make more effective utilization of the skills gained through trainings.

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