Can Financial Inclusion Reduce Household Food Insecurity? Evidence From Rural Odisha

Abstract

While food insecurity remains a critical issue, Financial Inclusion (FI) has recently drawn the attention of development economists due to its potential in attaining Sustainable Development Goals (SDGs). This facilitates livelihood diversification for households, empowers women, and consequently improves food security. Using 467 rural household survey data, this study evaluates the impact of financial inclusion on households' food insecurity in rural Odisha. The measurement of household FI is conducted using a multidimensional method, whereas propensity score matching (PSM) and endogenous switching regression (ESR) approaches are employed to evaluate the impact of FI on food insecurity. The findings disclose that 64% of the surveyed households are financially included, whereas 36% remain financially excluded. The PSM and ESR results reveal that households with the status of FI are less food insecure compared to those without FI. The study suggests that government policies should emphasize awareness of using financial services and assist the food-insecure households in achieving SDG-2.