Article summary
Abstract
This study evaluates how the Pradhan Mantri Jan-Dhan Yojana (PMJDY) influences financial inclusion in Begusarai, Bihar. Using policy records, official statistics, and evidence synthesized from prior field studies, we trace changes in access, usage, and service depth since 2014. The analysis profiles PMJDY’s delivery architecture—zerobalance BSBD accounts, RuPay debit cards with accident cover, simplified KYC, Business Correspondents, and Aadhaar-enabled payment rails—and links these features to outcomes in account ownership, savings mobilization, and credit access. We find substantial expansion in basic account penetration and a decline in zerobalance accounts, aided by Direct Benefit Transfers and wider ATM/mobile usage. However, persistent challenges remain: account dormancy, low financial literacy, uneven BC coverage, gender gaps in active use, and frictions in accessing small-ticket credit and insurance. Comparative insights with other inclusion tools suggest PMJDY’s superior scale and monitoring, yet emphasize the need to convert access into sustained activity. Policy recommendations include targeted financial education (especially for women and first-time users), strengthening BC quality and grievance redressal, nudges for recurring deposits and micro-savings, digitally enabled cash-flow management for micro-enterprises, and interoperable service bundling with micro-pension and microinsurance. PMJDY has shifted Begusarai’s inclusion frontier from mere account opening to use, but durable gains require a pivot from volume metrics to value and continuity of use. The paper offers a lens to inform India’s next phase of inclusive finance, centered on financial participation and improved household welfare.