Does Financial Inclusion Matter for the Socioeconomic Development of Marginalized People? Evidence from India

This research examines the drivers of financial inclusion in the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme. Also, it investigates the influence of financial inclusion through PMJDY on the socioeconomic status of marginalized people. Primary data were collected from 393 marginalized people of Himachal Pradesh. This study presents new insights by analysing the demand-side perspective of marginalized people using structural equation modelling approach. The study identified outreach, quality of financial services, usage and accessibility as statistically significant determinants in the PMJDY scheme for financial inclusion. Further, results confirm that financial inclusion promoted by PMJDY substantially improves the socioeconomic status of marginalized people. The study links financial inclusion and the socioeconomic wellness of beneficiaries, with income serving as a moderator; this is the research’s unique contribution to reducing financial exclusion. The research findings have implications for policymakers and financial institutions in formulating effective strategies to attain comprehensive financial inclusion, which can contribute to a strong socioeconomic development of marginalized people through PMJDY.