Achieving Financial Literacy for Financial Inclusion

Financial inclusion is one of the major socioeconomic challenges on the agendas of international institutions, policymakers, central banks, financial institutions and governments today. Financial inclusion is considered fundamental for economic growth and poverty alleviation in an economy. The World Bank has also declared their objective of achieving universal financial access by 2020. One of the important factors responsible for achieving financial inclusion is financial literacy. Financial literacy indicates people's understanding of financial products, concepts and risks; as well as their ability to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being. In this paper, the author outlines the financial literacy initiatives of RBI, the level of financial literacy in Gujarat state based on empirical research and suggests a 4-tier financial literacy Model that can help improve Financial Inclusion.