Evaluation of Unorganized Money Market in Rural Goa – An Empirical Study

A. Anto Shaju Sathish

As India is a vast country with diversity of conditions from one part to another, a uniform solution or a set pattern may not be applicable to the whole country. The Commission has, therefore, left the field open to different types of banking institutions to serve the country. Ultimately, the institutions which serve the country best will be adopted. The field is thus open to commercial banks, co-operative banks, rural banks and other financial institutions. At the same time, the country cannot afford to have what may be called inflationary conditions by unlimited and unrestricted lending, on the one hand, and institutions accepting deposits with little regards to their safety, on the other. The activities of these organisations have, therefore, to be regulated and the best institution for this purpose is the Reserve Bank of India. As, however the Reserve Bank of India may not be able to inspect and regulate the activities of all these institutions, it has been left to the nationalized commercial banks to regulate the activities of the indigenous bankers whom they finance, the nationalized banks in their turn being under the active surveillance of the Reserve Bank of India. Financial System plays a very crucial role in the functioning of the economy because it allows transfer of resources from savers to investors. At present in India, our honorable Prime Minister is making efforts to take formal finance to the rural areas and villages. The need for Financial Inclusion has been stressed on. Financial Literacy is becoming a popular concept and schemes like Pradhan Mantri Jan Dhan Yojana has been introduced. But inspite of all these efforts by the government, in rural areas still informal finance seems to play a prominent role. A major role is played in rural areas by indigenous bankers. Even despite digitization, the informal money market in rural areas has a major share in the total finance availed by the rural money market. Moneylenders, Chit Funds, etc are still more popular in rural areas as compared to the urban areas. To top it all, the unorganized money market is not regulated under any Act in Goa. The present research paper intends to analyze the reasons or factors due to which people in the rural areas prefer informal finance over formal finance. For the purpose of study, the data has been collected from 75 selected rural respondents, which is analyzed using Paired Samples T Test. The present research highlights the perception of the rural investors between their choice of Unorganized Money Market and Organized Money Market.

Volume 12 | 03-Special Issue

Pages: 105-110

DOI: 10.5373/JARDCS/V12SP3/20201243