INTRODUCTION AND BACKGROUND
Financial inclusion ensures that individuals and businesses have access to affordable financial products and services like savings, credit, insurance, and payments needed to manage and grow their economic activities (PMJDY, 2025). In India, financial inclusion has been a policy priority, largely driven by national initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and targeted financial literacy programs supported by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD). Yet, despite increases in bank account penetration nationally, regions like Bastar in Chhattisgarh continue to face deep challenges in translating formal access into meaningful financial engagement due to persistent barriers grounded in socio-economic marginalisation, tribal demographics, and infrastructural deficits (PMJDY, 2025; RBI, 2025; NABARD, 2025).
The Bastar region has a predominantly tribal population, including the Gond, Maria, Muria, Bhatra, and Halba, which make up approximately 66% to 70% of the total population in this division, with relatively low literacy rates and limited financial infrastructure compared with national averages (Census, 2011). In districts like Bijapur and Dantewada, female literacy remains critically low, with only 3 out of 10 women being literate. Scheduled Tribes that constitute a large share of the population often reside in remote forested terrains, creating additional barriers to financial access and literacy.
Financial literacy, understood as the ability to understand and use financial skills effectively for informed decision-making, is foundational for inclusion. Despite government efforts such as nationwide financial literacy saturation campaigns that opened millions of bank accounts in 2025, literacy and utilisation remain uneven (Finance Ministry, 2025). This paper investigates the complex barriers that impede financial literacy and inclusion in Bastar, integrating statistical data, government surveys, and academic perspectives.
LITERATURE REVIEW
A. National Financial Inclusion Trends
The Indian Financial Inclusion Index, published by RBI, revealed a steady improvement in inclusion metrics, rising from 64.2 in 2024 to 67 in 2025, indicating broader banking access, usage, and quality enhancements, though disparities remain (RBI FI Index, 2025). However, these aggregate figures mask significant geographic and socio-economic differences, especially in backward regions where digital and financial literacy remains low.
RBI and NABARD have promoted rural financial literacy through financial literacy centres (FLCs) and village-level campaigns to enhance awareness of banking products, government schemes, digital banking, and cybersecurity (Economic Times, 2025). As of March 31, 2025, 2,421 financial literacy centres were operational nationwide (Ministry of Finance, 2025), a foundation for inclusion efforts.
NABARD’s differentiated approach under its Financial Inclusion Fund (FIF) supports literacy camps, digital awareness programs, and infrastructure expansion, reaching millions of households (NABARD Annual Report, 2025). These efforts illustrate national prioritisation of financial awareness but also highlight the need for contextual programming in tribal areas like Bastar, where language barriers and low formal education impede comprehension.
B. Rural Inclusion and PMJDY
The Pradhan Mantri Jan Dhan Yojana (PMJDY) remains the flagship inclusion program, aiming for universal banking access with zero-balance accounts, insurance, and credit linkage (PMJDY data portal, 2025). As of December 31, 2025, Chhattisgarh reported over 18.5 million PMJDY accounts, indicating significant progress in account ownership. Yet, account ownership alone does not guarantee active usage or literacy, which depends on user understanding and trust. Literature shows that while PMJDY has increased savings and access, meaningful engagement with formal financial services in tribal and rural districts like Bastar is limited due to low financial planning and literacy skills.
C. Barriers in Tribal Regions
Recent empirical research examining financial literacy in Bastar’s Bhairamgarh block highlights limited awareness of banking services, digital payments, and formal financial instruments among tribal communities, linked to remoteness and lack of tailored financial education (Gupta & Tripathi, 2025). The study points to language barriers and traditional economic practices as impediments to adopting formal finance. Further, research on SHGs in Bastar demonstrates that participation in such groups increases financial engagement and empowerment, yet gaps in credit linkage and education continue to hinder sustained inclusion (Kawre & Singh, 2025).
D. Gender and Financial Literacy
Gender gaps in financial literacy persist nationally, with women, especially tribal women, having lower access to financial information and decision-making authority (OECD, 2020; RBI, 2025). Gender disparities in financial literacy are pronounced, with women often excluded from formal financial decision-making due to socio-cultural norms and lower educational attainment. SHGs have emerged as important platforms for women’s financial inclusion, but their potential remains underutilised due to inadequate training and market linkage support (NABARD, 2025). National campaigns such as RBI’s Financial Literacy Week 2025 emphasise women’s inclusion to address these gaps (RBI FLW, 2025).
E. Theoretical Framework
This study is grounded in the Capability Approach (Sen, 1999) and the Financial Capability Framework, which conceptualise financial inclusion as both access and the ability to make informed financial choices that improve well-being. The framework distinguishes between access and usage, asserting that true inclusion requires financial knowledge, confidence, and opportunities to participate meaningfully in financial systems.
RESEARCH QUESTIONS & HYPOTHESES
Research Questions:
What socio-economic and cultural barriers contribute to low financial literacy in Bastar’s backward districts?
1. How do infrastructural and digital challenges impede financial inclusion?
2. What strategies can enhance meaningful financial inclusion in tribal settings?
Hypotheses:
H1: Socio-economic marginalisation negatively impacts financial literacy in Bastar. H2: Limited infrastructure and digital access significantly hinder financial inclusion. H3: Culturally tailored financial education enhances inclusion outcomes.
METHODOLOGY
This paper uses a purely secondary research design drawing on data from government portals, financial inclusion indices, academic journals, national surveys, and credible news reports. Sources include RBI reports, NABARD annual publications, PMJDY dashboards, and peer-reviewed literature.
FINDINGS AND ANALYSIS
A. The Gap Between Account Ownership and Meaningful Usage
Data from the Pradhan Mantri Jan Dhan Yojana (PMJDY) dashboard indicates a robust expansion of banking access in Chhattisgarh, with over 18.5 million accounts active as of late 2025. However, a closer look at the Bastar division, which includes Dantewada, Sukma, and Narayanpur, shows that a significant portion of these accounts is utilised primarily for receiving Direct Benefit Transfers (DBT) rather than for proactive financial planning.
While deposit volumes are substantial at a state level, the utilisation metrics in remote tribal pockets suggest that accounts often remain dormant after the initial withdrawal of government subsidies. This confirms that “access” (the availability of an account) does not automatically translate into “inclusion” (the active use of financial tools for growth).
B. Socio-economic and Linguistic Barriers
The findings provide strong empirical support for Hypothesis H1, which links socio-economic marginalisation to low financial literacy. Bastar’s literacy rate (approximately 53–55%) is markedly lower than the national average, creating an immediate barrier to understanding complex financial contracts. Furthermore, a critical finding of this study is the linguistic mismatch in financial education. Most financial literacy materials and banking interfaces are available in Hindi or English, whereas the vast majority of the Bastar population speaks Gondi or Halbi. This creates a “comprehension gap” where tribal citizens may physically hold a RuPay card but lack the conceptual understanding of how to use it safely or manage their PIN.
C. Technological and Digital Infrastructure Barriers
Validating Hypothesis H2, the research shows that digital infrastructure remains the “missing link” in last-mile inclusion. Despite the push for a “Digital India,” the remote and forested terrains of Bastar suffer from:
• Weak Mobile Connectivity: High frequency of call drops and data failures in interior blocks like Bhairamgarh.
• Irregular Power Supply: Disrupts the functioning of Rural Information Centres and ATMs.
• Low Smartphone Penetration: Limits the adoption of UPI and mobile banking applications.
Statistical variance in inclusion outcomes across the districts is highly correlated with these infrastructural deficits, suggesting that digital-only strategies may inadvertently exclude the most marginalised.
D. Cultural and Gender Barriers
Cultural mistrust of formal banking institutions remains deeply entrenched in tribal regions such as Bastar, largely due to a long-standing reliance on customary credit mechanisms, community-based savings practices, and informal moneylenders, who are perceived as more accessible, flexible, and socially embedded than formal financial institutions. For many tribal households, informal systems are rooted in trust-based relationships and immediate liquidity, whereas banks are often viewed as bureaucratic, impersonal, and incompatible with indigenous socio-economic practices (RBI, 2022; World Bank, 2023). Financial literacy programs implemented under national initiatives have frequently adopted standardised content and delivery models, failing to adequately incorporate tribal dialects, cultural norms, and locally relevant financial behaviours, thereby resulting in limited participation and poor comprehension among beneficiaries (NABARD, 2021).
Gender norms further intensify financial exclusion, as traditional roles often restrict women’s mobility, decision-making authority, and access to financial information. In many tribal households, men remain primary financial decision-makers, while women, despite their significant role in household budgeting and informal savings, have limited exposure to formal banking interactions and financial education initiatives. Structural constraints such as lower literacy levels, lack of asset ownership, and limited access to identity documentation further inhibit women’s inclusion in formal financial systems (OECD, 2020; Ministry of Tribal Affairs, 2023).
DISCUSSION
This study investigated barriers to financial literacy and financial inclusion in the tribal districts of Bastar through three hypotheses addressing socio-economic marginalisation, infrastructural and digital constraints, and culturally tailored financial education. The findings support all three hypotheses, indicating that financial exclusion in Bastar is structural rather than incidental.
Hypothesis H1, which proposed that socio-economic marginalisation negatively affects financial literacy, is strongly supported. Low literacy levels, particularly among tribal women, significantly limit engagement with formal financial services. Evidence shows literacy rates in Bastar remain below national averages, with analysis confirming a positive association between literacy and financial inclusion. The high incidence of dormant accounts and limited use of financial products demonstrates that access without capability does not ensure meaningful inclusion.
Hypothesis H2 posited that inadequate infrastructure and digital access hinder financial inclusion, a claim clearly validated by the findings. While digital access strongly predicts inclusion outcomes, Bastar’s poor connectivity, unreliable electricity, and low smartphone penetration restrict the use of digital financial services. These constraints weaken digital inclusion policies and perpetuate reliance on cash-based and informal financial systems.
Hypothesis H3 asserted that culturally tailored financial education enhances inclusion outcomes, which is supported by qualitative evidence. Financial literacy initiatives are more effective when adapted to tribal languages, cultural practices, and delivered through trusted local institutions. In contrast, standardised programs show limited impact due to cultural and linguistic barriers.
Overall, the findings reveal that financial inclusion efforts in Bastar have been largely access-oriented, with insufficient attention to underlying capabilities. The confirmation of all three hypotheses highlights the need for context-sensitive, capability-enhancing policies to achieve sustainable financial empowerment in tribal and backward regions.
POLICY IMPLICATIONS
The findings of this study suggest that addressing financial literacy and financial inclusion in the backward tribal districts of Bastar requires a multi-dimensional and context-sensitive policy approach. While national-level financial inclusion initiatives have successfully expanded formal access, their limited impact on financial capability highlights the need for localised, inclusive, and participatory policy design.
First, policymakers should prioritise the development of linguistically and culturally contextualised financial literacy programs. Financial education initiatives must be delivered in local tribal languages such as Gondi and Halbi and should incorporate culturally familiar analogies, symbols, and communication practices. Training modules should move beyond basic awareness to focus on practical skills such as budgeting, savings planning, responsible borrowing, and digital transaction security. Collaborations with local NGOs, tribal leaders, and community-based organisations can enhance trust and participation, ensuring that financial literacy interventions resonate with local realities.
Second, there is an urgent need to strengthen last-mile banking and digital infrastructure. This includes expanding mobile network coverage, ensuring reliable electricity supply, increasing the availability of banking correspondents (BCs), and establishing digital service points in remote villages. Policymakers should adopt an integrated infrastructure approach by aligning financial inclusion objectives with broader rural development initiatives such as BharatNet and Digital India. Without addressing infrastructural deficits, digital financial inclusion strategies risk excluding already marginalised communities.
Third, Self-Help Groups (SHGs) should be leveraged more effectively as vehicles for financial inclusion and empowerment. While SHGs have demonstrated success in mobilising savings and facilitating credit access, their potential remains underutilised due to limited financial education and market linkages. Integrating structured financial literacy and digital training modules into SHG activities can enhance members’ financial decision-making capacity. Strengthening linkages between SHGs, formal banking institutions, and livelihood programs can further support sustainable income generation and financial resilience.
Fourth, policymakers must adopt gender-responsive financial inclusion strategies to address persistent gender disparities. Women in Bastar face compounded barriers due to low literacy, restricted mobility, and limited control over financial resources. Policies should focus on promoting women-owned bank accounts, digital literacy training, and access to tailored financial products such as micro-insurance and low-risk savings instruments. Embedding financial education within women-centric programs such as SHG federations and maternal health initiatives can further enhance outreach and impact.
Finally, policy interventions should incorporate monitoring and evaluation mechanisms that assess not only access indicators but also usage, financial capability, and long-term socio-economic outcomes. District-level financial inclusion dashboards and periodic impact assessments can help policymakers identify gaps and refine interventions. A shift from target-driven implementation to outcome-based evaluation is essential for ensuring that financial inclusion policies translate into meaningful empowerment in tribal and backward regions like Bastar.
LIMITATIONS & FUTURE RESEARCH
This study relies on secondary data and may not capture granular district-level nuances. Future primary research with surveys and interviews will deepen understanding of behavioural and perceptual barriers.
CONCLUSION
This study highlights that despite sustained national policy efforts to promote financial inclusion, the backward tribal districts of the Bastar division in Chhattisgarh continue to experience profound barriers to financial literacy and meaningful financial participation. While initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), financial literacy centres, and digital inclusion programs have significantly improved formal access to banking services, their impact in Bastar remains largely superficial and uneven. The evidence indicates that account ownership has increased; yet active usage, informed decision-making, and financial capability among tribal populations remain limited.
The findings underscore that financial exclusion in Bastar is not merely a function of inadequate access but is deeply rooted in structural socio-economic disadvantages, low educational attainment, linguistic diversity, and entrenched cultural practices. Limited schooling and high illiteracy levels restrict individuals’ ability to understand financial products, while the dominance of local tribal languages reduces the effectiveness of standardised financial education campaigns delivered in Hindi or English. In addition, infrastructural deficiencies such as poor road connectivity, unreliable electricity, weak digital networks, and sparse banking outlets further constrain the adoption of formal and digital financial services, particularly in remote and forested areas.
Cultural factors, including reliance on informal financial systems, mistrust of formal institutions, and gendered norms that restrict women’s financial agency, continue to shape financial behaviour in these districts. These barriers collectively diminish the transformative potential of financial inclusion initiatives, limiting their capacity to generate sustained improvements in livelihoods, savings behaviour, and financial resilience. The study also reveals that while community-based institutions such as Self-Help Groups (SHGs) offer promising pathways for inclusion, their effectiveness is curtailed by gaps in financial literacy, digital awareness, and institutional linkages.
Overall, the study emphasises that achieving inclusive financial ecosystems in tribal and backward regions like Bastar requires a paradigm shift from a predominantly access-oriented approach to one that prioritises financial capability, trust-building, and contextual relevance. Localised, culturally sensitive, and gender-responsive interventions—supported by robust infrastructure and continuous monitoring—are essential to bridge persistent inclusion gaps. By addressing these multidimensional barriers, financial inclusion policies can move beyond symbolic inclusion towards fostering genuine economic empowerment and equitable development among some of India’s most marginalised communities.