Impact of PMJDY scheme on the Financial empowerment of rural Poor – A study across Bangalore rural district in Karnataka, India

Abstract

The objective of this study is to analyze the effects of the benefits and features of the Pradhan Mantri Jan-Dhan Yojana (PMJDY) program on the financial empowerment of impoverished rural communities. The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a notable financial inclusion initiative in India that endeavors to promote financial wellness among rural populations.  This research is characterized as descriptive and employs primary data obtained from the beneficiaries of the Pradhan Mantri Jan-Dhan Yojana (PMJDY) in four Taluks located in the Bangalore Rural District. A Cochran formula was utilized to calculate the sample size of 385 respondents who were selected through a proportionate random sampling technique. The respondents were administered a structured questionnaire consisting of Likert scale statements. The evaluation of scale validity and reliability is imperative in order to meet the standards of sound research. The validation of the hypotheses is conducted through the utilization of Chi-squared and Structural Equation Modeling (SEM) Path analysis techniques.  The study's results indicate that the primary reasons for beneficiaries enrolling in the PMJD Scheme are the absence of a minimum balance requirement and the opportunity to access government benefits. The utilization of the overdraft facility is minimal in this scheme, and the easy transfer of funds is also underutilized due to inadequate technical infrastructure in rural regions. The scheme's benefits are not impacted by demographic factors such as gender, age, qualification, and experience. The study concludes through path analysis that the PMJDY Schemes have a significant impact of 76% on financial empowerment. This finding suggests that implementing this scheme nationwide could be an effective means of improving the financial well-being of rural India. The PMJDY Financial inclusion scheme has been in effect in India for a period of 8 years, during which there has been a decrease in the number of accounts opened under the scheme in recent times. Consequently, it has become necessary to investigate whether the scheme has had any impact on the financial empowerment of its beneficiaries. The potential impact of this tool could facilitate India's achievement of complete financial inclusion.