The financial services and banking industry have reflected tremendous growth in from the last few decades. Regardless of making such considerable improvements in relation with financial growth, viability and competitiveness, there is the presence of concerns that financial accessibility is not still able to serve underprivileged sections, remote and rural areas. Further, in the study has discussed how the financial services are provided to rural areas currently, the study aims to describe the importance of financial services for Agricultural productivities to eradicate poverty and improvise living standard.
The primary objective of the present study is to evaluate the accessibility of financial services amongst remote and rural communities. This is supported by following research questions:
By considering the low access of financial services for rural and remote areas, there is a high requirement of providing more access to such areas for the development of the country. There is important to know the current situation of financial access in remote areas, to take reasonable steps in improvising the same. The present study aims to evaluate the accessibility of financial services amongst the rural communities, in this research project, higher efforts have been made to consider the financial access in remote areas and to determine the impact of the same on individuals residing in those areas. This will assist in drawing suitable recommendations in developing effective banking and financial system in remote areas to provide them better financial support while getting rid of poverty.
The study starts with the Introduction Chapter, which provides the brief overview of all the related aspects connected with the concerned topic, it will be followed by literature review, wherein various secondary studied have been considered supported by different scholars. After that, Research methodology chapter is conducted, which includes various methods to the analysis and evaluate the main research questions, subsequent to this analysis, and discussion chapter will be considered to gain empirical findings and facts.
Financial accessibility widely referred as the households and the organizations that are capable of making use of financial services in a situation where they opt to do so can have considerable impacts of well-being and can make a contribution to the poverty reduction.As per the words of Rojas-Suarez and Gonzales (2010), the financial consistency and effectiveness, accessibility to financial services for massive sections of the population is rapidly renowned as critical for overall development. In essence, the study carried out by reflected that financial access enables persons and organizations to draw out from short-haul decision-making to inter- sequential delegation of resources (Flora, 2018). This further motivated the savings while eradicated the rise of self-finance thereby improvising incentive for effective investment and for the expansion and intensification of markets of products and services. Although, its significance and recognition are highly supported by the various amount of secondary literature in which the financial access stays as low in various countries.
In contrary to this, the study of Yaron, Benjami, and Piprek (1997), articulated that the rural financial markets, in essence, those who are engaged in agricultural credit institutions owned by state, have been at the core of government interventions in most of the developing countries in more than the past fifty years. With the buttress of different donation agencies and government have channelized usable resources in such programs to ensure a continuous movement of affordable credit to the agriculture-based individuals by plenty of financial intermediation methods (Rakodi, 2014).
In the study conducted by Howell and Wilson (2005), provided a brief overview of the manner by which individuals in regional and rural areas did interaction with financial service institutions. In the paper, it was reflected that, as in the year, 30 June 2017, approximately 6.9 million individuals, or approx 28 per cent population of Australia reside in rural areas.It was also found in the research paper that, around 8 million individuals or approx 1/3rd of the population of Australia resides in the exterior of a capital city. The paper studied that accessibility to bank divisions, and other related ATM or banking services reduce as there is an increment in the remoteness (Prout, 2018). To this note, due to the higher distance engaged to access goods and services, in rural and remote areas might access financial services is low in the various mechanism as compared to the individuals living in metropolitan areas.
In accordance with the study conducted by the Argent, and Rolley (2000), the provision of the financial services present in rural Australia is a considerable issue for public policy, stated in the higher media level and politics interest on the current mass of branch closures. However, there are several aspects of the recent debate about the financial service delivery to the remote communities that they are better, best, worst or mistaken (Baker, Merkert and Kamruzzaman, 2015). The study investigated that, by making use of telephone directories meant for New South Wales, wherein non?metropolitan based bank branch listing from 1981 to 1998 was collected.
A data categorisation in accordance with the remote and rural classification of Metropolitan Areas in the secondary paper revealed that amongst a spatial relocation of financial service providers that backward New South Wales has impacted on a disproportionate basis by a comparatively new and rigorous service withdrawal. It has been demonstrated in the secondary research that the responses held from companies to improvised competition in the financial system are highly important in making the decision for the rural financial and banking access as compared to the local population trends.
In the study conducted by Mader (2016), it was stated that financial inclusion turned out to be a core element on the global policy agenda as the global community chases the path of post-2015 development structure and the goals of sustainable development. The significance for sustainable development has been rapidly realized by the global forums, wherein the financial inclusion is integrated into the financial regulatory agenda, with the specified aims and objectives being established. Although, the interest emerged in the financial inclusion from the post-crisis regulatory reform based on finance in which the financial inclusion is rapidly known as the vital element of financial consistency and cautious regulation, for such economy that is highly based on financial inclusion concerns and remittances in increasing the developmental influence of remittances through formalizing the remittance movements, while minimizing the transferable costs into effective activities by the successive banking systems.
The results of such interventions have been usually not satisfying, in contrast to this, recent developments in the rural financial services provisions, at the time of last ten decade have stated that the precise institutional design and compliance to suitable policies that compensate generously, and have the possibility to produce considerable outcomes in context with higher institutional outreach as well as self-sustainability.
In accordance with the Nagarajan and Meyer (2006), it has been found that the new rural finance concept is based on the facts that remote individuals are bankable. At the same time, they require and deserve it the most, remote community stays as the largest non-served market meant for financial services while ensuring that the financial inclusion can reveal the substantial economic possibility of rural areas. Socio-cultural and economic factors can lead to Australian population members inclusive of the individuals in remote and rural areas, facing issues from the shortage of access to banking services and financial services. In the similar trend, the paper asserted that people who live in capital cities were more expected to be strictly or completely exclude financially, while the people who live in country areas were more expected to exclude marginally.
Various challenges continue to experience rural financial intermediation issues of choosing the set of institutional policy and design options which best results in various socioeconomic situations. These challenges are inclusive of the choosing of the suitable operational modes which vary considerably the traditional patterns of employing concessional rate of interest, standing in support of agriculture instead of the rural operations, neglecting the formation of saving deposits and adopting the expensive and ineffective service means. By adopting the best practices in the areas of rural with better finance same as provided in the urban areas, while cautiously implementing them to social, economic and cultural setting by making reducing in eradicating the large fiscal costs related with the ineffective agricultural credit actviit4es, it is potential to support effective rural financial markets in several countries.
The challenges must be effectively identified which are to be faced by rural financial intermediation, evaluation of a traditional approach to rural finance, and considering the rural finance which can make a contribution to incomes enlargement and reduction in poverty while reviewing the government role in the same. The rural finance institutions performance is considered, and proposal of guidelines is to be done to build institutional RFI’S capacity
The present chapter is based on the making justified solutions for the research questions, while gathering the meaningful information the research topic which is financial service access amongst remote and rural communities in order to attain the best outcomes and satisfying the goals and objectives of the research(Mackey and Gass, 2015).
In the present investigation, data will be collected through secondary sources, wherein researcher will consider the secondary investigations conducted by scholars in order to prepare a better literature review. Also, the data will be collected from books, journals, industry reports, newspapers and Google scholar (Taylor, Bogdan and DeVault, 2015).
Interpretivism research approach is selected for the present investigation, as it matches the nature and objective of the study by guiding the researcher to evaluate the accessibility of financial service access amongst remote and rural communities (Silverman, 2016). Along with this, by this researcher will also concentrate on the qualitative method and can interpret the reality indistinct manner.
Deductive approach is best suitable when it comes to the transforming the generalized aspects into specified ones. It will enable the strategic designing in order to test the hypotheses on the basis of pre-determined theories. The deductive approach will result beneficial while testing the validity and reliability of the overall study, this approach is designated for the reasonable logic and thereby attaining the best results (Alvesson and Sköldberg, 2017). This, this approach is most appropriate in terms of present study, as it aims to best hypotheses based on the existing theory thereby making the study more specified, justified, usable and viable.
For the present investigation, qualitative research type is elected, it is because the study tends to gather meaningful non-numerical data to dive deeper into research problems and gain better insights through revealing trends and different opinions on the concerned topic (Marshall and Rossman, 2014). It is highly concerned with the interpretation of human behaviour from the viewpoint of the informant; it helps the researcher by estimating an adjusted and dynamic reality.
Data will be analyzed by thematic analysis, as this is particularly used when there is a selection of qualitative research base. It will assist the researcher in accomplishing the goals of the present investigation, and by considering this model, the researcher can offer better justifications supported by the appropriate themes for the concerned topic through which better understating will be provided to the reader (Glaser and Strauss, 2017).
Ethical considerations are very important in conducting any research, for the present investigation all the possible ethical concerns are considered and are properly addressed. Since the data is collected from secondary sources; it will be ensured by the researcher that the sources are purely trusted and reliable. Also full credit will be provided to the secondary scholars for their given contributions (Flick, 2014).. In addition, aspects such as honesty, validity, credibility, versatility and feasibility are integrated while conducting the research. No plagiarism will be ensured in the research, along with this high confidentially and security will be maintained.
Some amount of collective information is accessible on various superannuation funds as well as insurance corporate branch in rural and remote areas. On the other hand, the APRA (Australian Prudential Regulation Authority) have gathered information on several branches of ADI (Authorised Deposit-Taking Institutions) branches and other related face-to-face providers of service in rural and regional areas, along with the range of ATMs (Automatic Teller Machines). As on June 2017, information held from ARPA reflects that ADI’s total branch of 5,814, in which 2,484 were in rural areas. In contrary to this, 4,674 of the other service provided by face-to-face interactions offered ADIs, 2,543 are in rural areas. As per the expectancy, accessibility to the bank branch and other services of face-to-face or reduction in ATM as there is an increment in remoteness.
In accordance with the submission held by four rural banks in the year 2014 Financial System Inquiry, almost all of the banks which are owned domestically within Australia as rural banks, constructing societies and credit unions. There is a competition of rural banks in all markets, but they have higher existence in retail banking, rural banks are comparatively less represented in big company financing and institutions. The submission notes of regional banks that many of the rural banks have agribusiness offerings and that rural banks make comparatively big investments in the overall infrastructure of banking, ATM, bank branches and other amenities for example, as compared to the main banks and other banks , as evaluated by the services for each $1 billion in terms of assets.
As evidenced by various secondary investigations, the challenges which are present in the financial service access in the rural and remote areas are, individuals in such areas feel that their money is not secured if they keep it in the banks, they also consider that the services are not reliable, as well as they acknowledge that the fees for withdrawing cash and doing transactions are relatively expensive There can be a demand-side of restriction too, it can be said that the main challenge lies in the aspect that people in rural areas are not interested in either doing savings or do not have sufficient money to make deposits in their bank accounts. Without a doubt, also giving consideration to the secondary findings, most of the people stated higher expenses and lower incomes as the main obstacle to saving.
Several other challenges such as issues related to the rural financial intermediation of selecting the institutional options and design set, other challenges include the modes of operations by considering the current situation of rural and remote areas.
A study by Howell and Wilson (2005) suggested three instances of ways wherein those living in remote and rural areas might face issue from financial exclusion are said to be bank branch closures, which are comparatively high fees of ATM and comparatively less accessibility to the e-banking, digital services and internet. Thus, due to financial inclusion, people might become more susceptible to the financial tension and can suffer from higher poverty, debt and insolvency. It is also recommended to banks by making use of programs and providing interest-free loans to the rural people can gain trust and provide them with the eligibility to grow and overcome with their situations, further contributing to the economic development.
By considering the above analysis, it can be recommended that trust is the most significant rationale behind individuals who are not making use of present banking services, and so offering reinforced customer protection by tough regulation and insurance deposit can be very significant for take-up. In addition, there is a requirement to provide more attention towards the cost and convenience element of securing products and services that banking authorities offer to make sure that these are widely attractive and effective to the poor. Moreover, since most of the individuals are not informed regarding the banking choices, and further effective marketing from the bank is to be assured, so as to build more of the trust factor.
Conclusion
Banking and financial industry have shown remarkable growth in the last few decades, but it had not advanced and flourished in the rural and remote areas where the people deserve it the most. Since there is the presence of private firms in local, so there is must be provided more focus to rural areas, along with this there is a high requirement to determine the challenges present in the same while making improvement in areas. Rural areas have witnessed low access of financial service, so by considering the same financial institutions are attempting to improvise their services to ensure better support and optimal delivery of financial services. Thus, the study concludes that there is a requirement to identify the challenges as well as there is a scope to implement better financial services and options to rural areas for promoting better economic development.
References
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Baker, D., Merkert, R. and Kamruzzaman, M., 2015. Regional aviation and economic growth: cointegration and causality analysis in Australia. Journal of Transport Geography, 43, pp.140-150.
Data calculated from Australian Prudential Regulation Authority (APRA), Statistics: ADIs’ Points of Presence, June 2017 Available through <https://www.apra.gov.au/publications/authorised-deposit-taking-institutions-pointspresence>.[Accessed on 21st August 2018].
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