Determinants of Financial Inclusion in Himachal Pradesh

Abstract This study explores the determinants of financial inclusion among rural households in Himachal Pradesh, India, using probit and logit models. A multistage stratified random sampling technique was employed to collect data from 375 respondents across three representative districts. Financial inclusion was analysed across multiple dimensions, including investment, awareness, ownership, credit, microfinance, insurance and pension. Key findings indicate that higher education levels, financial knowledge and income significantly enhance financial inclusion. However, barriers persist for women, individuals Below the Poverty Line (BPL) and certain age groups. Gender disparities were observed, with females showing lower awareness but higher engagement in microfinance. Marital status, family structure and attitudes also emerged as critical factors influencing financial behaviors. The results underscore the importance of targeted policies to bridge inclusion gaps and promote equitable financial access. These insights contribute to understanding rural financial inclusion dynamics and inform strategies to enhance socio-economic well-being in underbanked regions. Keywords: Financial inclusion, Socio-economic factors, Knowledge index, Behaviour index, Attitude index, Knowledge index