EXPLORING THE ROLE OF BUSINESS CORRESPONDENTS IN PROMOTING ACCESS OF BANKING SERVICES THROUGH FINANCIAL LITERACY AMONG THE CUSTOMERS OF UNDER-BANKED AREAS OF PONDICHERRY

Abstract

In the contemporary landscape of financial services, the role of Business Correspondents (BCs) has become increasingly pivotal, especially in regions characterized by limited access to formal banking. This research endeavours to delve into the nuanced dynamics of under-banked areas of Pondicherry, shedding light on the indispensable role played by Business Correspondents in not only facilitating access of banking services but also promoting financial literacy among the local customer base.  The objective of the study is to explore the major role played by the Business Correspondents in promoting the Access of Banking Services through the improving Financial Literacy among the customers residing in the under-banked areas of Pondicherry, India.

This study adopts an exploratory and descriptive approach, employing a mixed research methodology that integrates both qualitative and quantitative methods. The research focuses on banking customers in the under-banked areas of Pondicherry, India, specifically those utilizing the services of BCs. The sample, selected through convenience sampling, comprises 120 customers, and primary data is collected using a structured questionnaire. The researcher employs a combination of descriptive and inferential statistical techniques for data analysis.

The study underscores the pivotal role of ‘Transaction Facilitation’ in predicting banking services access through Business Correspondents, offering actionable recommendations for their effectiveness. The proposed strategies, such as targeted outreach and technological integration, form a strategic framework for stakeholders and policymakers to enhance the impact of BCs. These findings contribute significantly to understanding BCs' roles in local finance, emphasizing their influence on customer perceptions, financial literacy, and banking service accessibility.

KEY WORDS: Business Correspondents, Financial Literacy, Financial Inclusion, Access of Banking Services, Transaction Facilitation, Customer Empowerment.