Wednesday, March 29, 2023
News
NEWS HOME
PRN INDIA
Sharp Decline in Credit Gap During Modi Government
  SocialTwist Tell-a-Friend  
   

Credit gaps fall by 12.01% during 2015 to 2022
SKOCH Financial Inclusion Task Force (FITF) Report

NEW DELHI, Jan. 31, 2023 /PRNewswire/ -- Credit gaps in India declined by 12.01 percentage points in seven years between 2015 and 2022 as against a mere 6.22 percentage points drop in the previous 14 years between 2001 and 2015, showing impressive outcome of the Financial Inclusion initiatives taken by Prime Minister Narendra Modi government, according to a report released by SKOCH Financial Inclusion Task Force ahead of the Union Budget 2023-24.

In 2001, credit gaps in India stood at 94.91 per cent. This declined marginally to 92.97 per cent in 2005 and further to 90.03 per cent in 2011 and 88.69 per cent in 2015. Though there was a consistent decline in credit gap between 2001 and 2015 but the progress was marginal.

Considerable progress was witnessed between 2015 and 2022. During this 7 year period the credit gap fell from 88.69 per cent in 2015 to 76.68 per cent in 2022, registering a decline of 12.01 percentage points.

Credit gap refers to the proportion of people having no access to formal credit. SKOCH Financial Inclusion Task Force research report on credit gaps uses the same methodology of calculation as used by Rangarajan Committee in its report released in 2008. A Committee on Financial Inclusion headed by former RBI Governor C Rangarajan analysed credit gaps for the year 2005.

Commenting on the findings of the report, SKOCH Group Chairman Mr Sameer Kochhar said, "Access to credit is one part of the problem. The Task Force will additionally examine the impact of absorptive capacity of the population, something, that did not receive much attention in the past. It is likely that a large number of people are not able to access credit because of lack of absorptive capacity and associated costs."

He further added, "The significant findings of the report are a positive relationship between growth in credit and growth in Net State Domestic Product (NSDP) and a relationship between growth in credit and reduction in multidimensional poverty."

The research report is based on input and analysis of the Financial Inclusion Task Force formed by SKOCH Group. The members of the task force include: Dr Deepali Pant Joshi, Former Executive Director, Reserve Bank of India; Prof S Mahendra Dev, Chairman, Institute for Development Studies; Dr Siraj Hussain, Senior Visiting Fellow, ICRIER; Mr Jiji Mammen, Executive Director & CEO - Sa-Dhan; Ms Reema Nanavaty, Director, SEWA; Dr Alok Misra, CEO & Director – MFIN; Mr S S Mundra, Chairman, BSE Ltd; Mr U K Sinha, Former Chairman, SEBI; Mr C S Ghosh, MD & CEO, Bandhan Bank; Dr Amarjeet Sinha, Former Union Rural Development Secretary; Mr Anil Bhardwaj, Secretary General, FISME; Prof Abhiman Das, RBI Chair Professor in Finance & Economics, IIM- Ahmedabad; and, Dr Ajit Ranade, VC, Gokhale Institute of Politics & Economy; Dr Deepak B Phatak, IIT-B, Mumbai; Ms Renana Jhabwala, Chairperson, SEWA Grih Rin Ltd; Mr Ajay Thakur, Head, BSE SME; and, Ms Jayashree Vyas, MD, Mahila Sewa Sahakari Bank.

The SKOCH Financial Inclusion Task Force research report reveals wide geographical variations in credit gaps. States/UTs that have witnessed sharp drop in credit gaps include Tamil Nadu, Chandigarh, Maharashtra, Puducherry and Kerala. In Tamil Nadu the credit gaps fell to 51.38 per cent in 2022 from 91.54 per cent in 2001. Tamil Nadu's performance has been consistently impressive since 2001. Credit gap in Tamil Nadu fell from 91.54 per cent in 2001 to 75.58 per cent in 2011 and further to 62.29 per cent in 2015. On the other hand, the major gains in Maharashtra and Chandigarh were recorded post 2015.

North Eastern states still face acute credit gaps and are struggling to make progress. In Arunachal Pradesh credit gaps stood at 93.17 per cent in 2022 as compared to 96.60 per cent in 2001. The state and union territories where credit gaps are over 90 per cent include Chhattisgarh, Lakshadweep, Meghalaya, Nagaland and Daman & Diu.

Bihar and Uttar Pradesh also remain among the major drag. The credit gap in Bihar dropped to 89.83 per cent in 2022 from 94.81 per cent in 2015. In Uttar Pradesh, credit gaps dropped from 94.06 per cent in 2015 to 89.95 per cent in 2022. In these two major states the progress between 2001 and 2015 was pretty slow.

The research report also presents district wise analysis of credit gaps. As per the report, 211 districts still face a credit gap of more than 90 per cent.

The report also analyses correlation between credit gaps and socio-economic indicators including multi-dimensional poverty, women's education and access to clean fuel for cooking among others.

FINDINGS THUS FAR

  1. After seeing marginal progress till 2015, the country has made considerable progress since, reducing the overall credit gap to 76.68%.
  2. While numerous States and Union Territories have made commendable progress since 2004, the North Eastern states are still struggling to make progress.
  3. The correlation to multi-dimensional poverty outlines how increasing access to credit reduces poverty.
  4. The correlation to NSDP of states shows positive impact of credit.
  5. Microfinance Institutions haven't been able to reach districts with acute credit gaps. However, with the removal of interest rate ceilings, they are incentivised to reach hard-to-reach districts with acute credit gaps.
  6. There is still a lot of progress to be made in making credit more accessible in the country, with 211 districts still facing a credit gap of more than 90%.
  7. In 2005, the Rangarajan Committee Report had said that 255 districts faced a critical credit outreach gap of 95%. In 2022 that number had gone down to 28 districts.
  8. While the average outreach gap in 2022 is 76.68%, the average for Aspirational Districts is 88.33%.
  9. There is a correlation between women's education and access to clean cooking fuel with credit gap.
  10. Other socio-economic factors were found to be statistically insignificant.

About SKOCH Group

SKOCH Group is India's leading think tank dealing with socio-economic issues with a focus on inclusive growth since 1997. The Group companies include a consulting wing, a media wing and a charitable foundation. SKOCH Group is able to bring an Indian felt-needs context to strategies and engages with Fortune-500 companies, State Owned Enterprises, Government to SMEs and Community-Based Organisations with equal ease. The repertoire of services includes field interventions, consultancy, research reports, impact assessments, policy briefs, books, journals, workshops and conferences. SKOCH Group has instituted India's highest independent civilian honours in the field of governance, finance, technology, economics and social sector.

For more information, please visit www.skoch.in or contact skoch@skoch.in

Media Contact:

Dr. Gursharan Dhanjal
gsd@skoch.in
+919811156688

Photo: https://mma.prnewswire.com/media/1992858/SKOCH_Group.jpg

Cision View original content to download multimedia:https://www.prnewswire.com/in/news-releases/sharp-decline-in-credit-gap-during-modi-government-301734569.html

More News by PR Newswire India

Great Place To Work India and HDFC ERGO come together to drive the movement of 'Making India a Healthy Place to Work For All'

NetEase announces "Lord of the Rings" Game Fanfiction Contest

Shoolini Engineering Earns High SCImago Rankings

Advertising legend Raj Kamble is the only Indian Nominee at Campaign's Global Agency of the Year Awards 2023 list

MIT Technology Review Examines the Emergent Industrial Metaverse with Siemens AG

BRITISH VIRGIN ISLANDS COMPANIES SUPPORT 2.3M JOBS AND GENERATE US$14BN IN TAX REVENUES GLOBALLY

Teleperformance launches its futuristic new site in Hyderabad

A Resolution through Farmer's Training on the Water Crisis Management in Agrarian India

E Ink Teams up with Indian Tech OEM SuperUs to Drive Localization in India

Valuebound Attains AWS Advanced Consulting Partner Status, Offering Expert Cloud Migration Services

SafeHouse Tech launches SafetyScore to assess user's safety online

Mentoria Partners with Governments and Foundations to Make India #CareerReady

People in Asia seek to extend health span for longer, healthier retirement, Manulife survey shows

Omdia: Samsung leads while BOE increases small medium AMOLED shipment market share in 2022

BMO Recommends Shareholders Reject TRC Capital's Below-Market "Mini-Tender" Offer

APPTIO INDIA LLP Is Great Place to Work Certified for Second Year

BETT 2023: ViewSonic to Debut Expanded EdTech Solutions Across UNIVERSE Virtual Campus and myViewBoard Ecosystem

LE DU IN BANGKOK CLAIMS NO.1 SPOT AT ASIA'S 50 BEST RESTAURANTS 2023

MNCs View CIIE as Launch Pad into Chinese Market

Kivu Consulting, Inc. announces strategic partnership with Microsoft

Argentina's Minister of Economy Sergio Tomás Massa and Top Silicon Valley Investors Marc Andreessen and Ben Horowitz to Speak at PRIORITY, Powered by FII Institute

Kixx Aims to Become Top Lubricant Brand Around the World, Highlighting Its Advanced Industrial Lubricants

Movable Ink Launches New Mobile Suite to Help Brands Worldwide Better Engage Customers on Their Channel of Choice

BIMINI HEALTH TECH ACQUIRES EXCLUSIVE LICENSE TO ACELLULAR DERMAL MATRIX PRODUCT PORTFOLIO

VCTI Announces Appointment of Scott Widham to Board of Directors

Lacework Marries its Global Partner Ecosystem with the Cloud Security Needs of Customers

Sennheiser Profile USB microphone provides ease of use and best-in-class audio

IBM Brings Generative AI Commentary and Hole-by-Hole Player Predictions to the Masters Digital Experience

Kohler Presents 'The Creator's Journey' at Milan Design Week

Omega Seiki Mobility (OSM) partners with cKers Finance to provide retail finance for electric three wheelers

AV-Comparatives awarded best-performing IT security software at Hasegg Castle / Royal Mint in Hall, Tyrol

Colgate-Palmolive promotes 'Innovation in Oral Health' in association with Indian Dental Association

Allstate India Named One of India's 40 Best Workplaces in Health and Wellness 2022 by Great Place to Work® Institute

Yokogawa Releases OpreX Asset Health Insights with Enhanced Functionality and Alibaba Cloud Support

STL's optical products testing labs rated highest on stringent quality standards set by NABL and TEC

2023 Africa Wealth Report Reveals 'Big 5' Host 56% of Continent's Millionaires

Scharf Investments Global Equity Strategy Awarded Mandate from a Key Nordic Pension Fund

Medanta Gurugram recognized as the Best Private Hospital in India Fourth Time in a Row

Hexaware's Vikash Jain Honored at ASSOCHAM Vibrant Bharat CFO Summit & Awards and CFO100 2023 Programme for Outstanding Financial Leadership

VdoCipher Video Player Powers 3,000+ Platforms across 120+ Countries

UST's CSR Initiatives Recognised at 2023 KMA Awards

Amway Applauded by Frost & Sullivan for Capitalizing on Innovative Competitive Strategies to Drive Differentiation in Its Home Water Treatment Solution in APAC

Colliers expands capital markets & investment business across asset classes

PR Newswire Sees 7% Growth in Asia-Pacific Release Distribution

QSnatch infections are the leading cause of malicious DNS traffic in Asia Pacific, according to latest findings by Akamai

KPG Roofings Opens Its First roof tile Showroom in Hyderabad and 40th showroom in India

Otr Elkalam: In the world's largest religious competition - A Saudi Opera Singer Eliminates a Voice Coach

The Organizing Committee of Memorial Ceremony to Ancestor Huang Di in his Native Place Held its Press Conference in Beijing

Aramco to expand presence in China by acquiring 10% stake in Rongsheng Petrochemical

BNI® TO HELP ITS MEMBERS DOUBLE VALUE OF THEIR BUSINESS

Syndigo Announces Additional Generative AI Capabilities to its Client Platform

2026 All-Time High in Store for Global 300mm Semiconductor Fab Capacity After 2023 Slowdown, SEMI Reports

Tata Communications brings JAMVEE™ - an integrated, simplified cloud-based calling solution for global enterprises

38th Annual World Petrochemical Conference: Wanhua Chemical Shares Inspiring and Insightful Practice on Sustainability in Petrochemical Industry

CONNECTING BUYERS, SELLERS TO $1 TRILLION M&A MARKET WITH NEW DEAL DISCOVERY SaaS SOLUTION

Shipping industry can save $50 bn through four enablers of operational efficiency

LyondellBasell and EEW sign LOI for potential advanced waste sorting

Armis Achieves U.S. Department of Defense Impact Level 4 Authorization

The Second International Forum on "Democracy: The Shared Human Values" kicked off in Beijing

Bitget Becomes the First Centralized Exchange to Offer Financial Transparency Through Space and Time

Forever New Launches Exquisite SS23 Collection Featuring Pooja Hegde

Transparent & good governance, inclusive Growth and opportunities for all mark the emergence of New India under the leadership of PM Narendra Modi says Union MoS Rajeev Chandrasekhar

Inkspell set to organize the Video Media (vIdea) Awards & Summit 2023 on 27th April

Indian Low-voltage Switchgear Market Witnesses Surge Due to Pent-up Demand and an Increase in the Average Price

Aramco JV HAPCO to commence construction of major refinery and petrochemical complex in China

GCL System Integration Brings N-Type Innovation TOPCon and Latest BIPV Products to PV EXPO 2023

Aditi Mittal, Director at IndiaBonds and A. K. Group wins Times 40 Under 40 Award

Beamery Announces TalentGPT, the World's First Generative AI for HR

Appian appoints Douglas Coleman as Head of Mexico

Measure the Impact of Mantras on the Brain with the Sadhana app

International Aluminium Institute launches Aluminium Forward 2030 Coalition

Bharat KYC secures 'Fastest eKYC' and QuantPower bags 'Best Algo Trading Platform' Award from NITI Ayog Advisor & Bollywood Diva Bhagyashree

Transcoding and Content Security Workflow Simplified: INKA Entworks's PallyCon and Dolby Hybrik Join Hands for an Integrated Solution

ESG practices towards transformative change for a more sustainable world

Making Open Source Truly Open

The 3rd Conference of Great Business Partners to be held in Shandong

New Cryptocurrency BASALTCOIN set to Launch with a Mission to Revolutionize the Greentech Industry

CGTN: How China keeps its promise to build a community of common health for mankind

CGTN: Analysis: China's economic resilience boosts global recovery prospects

YourStory's TechSparks makes thundering debut in Mumbai: A two-day gala featuring India's top entrepreneurs, investors, innovators, and more

 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
INDIA WORLD ASIA
No prescribed format for issuing provisi...
Nagaland adopts resolution to repeal 200...
Sharjeel's speech at Jamia was provocati...
Rajasthan govt ready to listen to doctor...
50 case files missing from Muzaffarnagar...
MBBS student jumps off autorickshaw as d...
More...    
 
 Top Stories
Godrej Security Solutions strengthe... 
Anupam Kher, Ravi Teja's pan-Indian... 
Zendaya to receive Star of the Year... 
Madhya Pradesh: Fire breaks out at ... 
NCP leader Mohammad Faizal's Lok Sa... 
"I think he is fit enough to play f... 
PM Modi is "corrupt himself", alleg... 
Global security landscape faced wit...