NABARD and Rural Financial Inclusion in Bihar: Opportunities and Challenges

NABARD and Rural Financial Inclusion in Bihar: Opportunities and Challenges Soni Singh* Rural financial inclusion constitutes a significant foundation of inclusive economic development, as access to savings facilities, institutional credit, insurance, pension schemes, remittance services and digital financial platforms can strengthen the economic resilience and livelihood opportunities of rural households. The issue assumes particular importance in Bihar, where a substantial section of the population remains dependent on agriculture, informal employment, seasonal migration and small-scale entrepreneurial activities. In this context, the expansion of formal financial institutions and services is essential for improving the financial security and productive capacity of rural communities. The National Bank for Agriculture and Rural Development (NABARD) has contributed to the advancement of rural financial inclusion in Bihar through a range of institutional and developmental interventions. Its activities encompass refinance support, financing of rural infrastructure, promotion of Self-Help Groups (SHGs) and Joint Liability Groups (JLGs), financial literacy initiatives, institutional capacity building, digitalisation of financial services and strengthening of rural financial institutions. The SHG–Bank Linkage Programme has emerged as an important mechanism for connecting economically weaker sections with formal banking institutions. Similarly, NABARD's association with the Bihar Rural Livelihoods Promotion Society (JEEViKA) has helped establish wider institutional networks through which rural women and economically vulnerable households can access savings and credit facilities. According to NABARD's Status of Microfinance in India 2024–25, as of 30 September 2024, JEEViKA had facilitated the formation of more than 10.63 lakh SHGs in Bihar, with approximately 96 percent of these groups having savings linkage and nearly 90 percent having credit linkage. Against this background, the present article analyses the contribution of NABARD to rural financial inclusion in Bihar and examines the emerging opportunities and persistent constraints associated with this process. Particular attention is given to digital banking, SHG-based financial services, women-led institutional networks, JLG financing, agricultural credit and financial literacy programmes. The study also considers challenges related to digital exclusion, physical and technological infrastructure, accessibility of institutional credit, repayment capacity and institutional effectiveness. It is argued that the future trajectory of financial inclusion in Bihar should move beyond the limited objective of expanding bank-account ownership towards ensuring regular, affordable, accessible, secure and productive utilisation of financial services by rural households. * Research Scholar, Department of Commerce, M.U., Bodh Gaya, Mob. : 6204641381, E-Mail : soni03oct @gmail.com