IMPACT: International Journal of Research in Humanities, Arts and Literature (IMPACT: IJRHAL) ISSN (P): 2347-4564; ISSN (E): 2321-8878 Vol. 5, Issue 10, Oct 2017, 11-18 © Impact Journals IMPACT OF THE FINANCIAL LITERACY PROGRAMME ON FARMERS IN PULLU VILLAGE SREELAKSHMI C. C Teaching Faculty, Department of Rural Banking and Finance Management, College of Co-Operation, Banking and Management, Kerala Agricultural University, Kerala, India ABSTRACT The present study examined the impact of the financial literacy programme on farmers in Pullu village. The study wasmainly based on primary data collected through a semi-structured interview schedule from 60 farmer respondents selected randomly. Data were analyzed with the help of percentages and paired t-test. The study revealed that the FLP in Pullu Village has significant impact on the awareness and usage level of savings bank account by farmers. The Programme could also improve the awareness level of respondents about ATM. But FLP could not bring changes in the usage level of ATM since there is no ATM in the area and the USB is nearer to the farmers than the nearest ATM. Hence the awareness and usage of ATM services can be increased only through the provision of ATM. Since respondents are not possessing smart phones, the scope for mobile banking is very limited in the study area at present. The study also revealed feature that none of the respondents are taking credit from informal sources even though money lenders are prominent in the area. FLP has been successful in creating at least partial awareness regarding KCC among the farmers. The study suggested the use the services of business correspondents from their local area to spread awareness about modern banking services and schemes among farmers. KEY WORDS: ATM, Financial Literacy, KCC, Savings Bank INTRODUCTION Financial literacy is the possession of knowledge and understanding of financial matters. It refers to the set of skills and knowledge, that allows an individual to be informed, and take effective decisions with respect to all of their financial resources. The absence of financial literacy can lead to making of poor financial decisions, that can have adverse effects on the financial health of an individual. Hence, financial education or financial literacy has assumed greater importance in the recent years, in the policy decisions of the Government of India (GOI) and Reserve Bank of India (RBI). Being an Agra – based economy, financial information and financial knowledge is essential for farmers, since farming activities cannot be done without agricultural credit. Financially, literate farmers can make effective use of the various financial products and services, of the institutional sources, so that, they will be relieved from the clutches of the unorganized financial sources. Hence, Financial Literacy Programs are being conducted by the banking institutions, at their own initiative and as per the directions of RBI, for all sections of society including farmers, after identifying areas where financial exclusion is high. The present study relates to such a Financial Literacy Program, conducted for the people of the Palau village of Thrissur District. STATEMENT OF THE PROBLEM Pullu village in Chazhoor Panchayat of Thrissur District of Kerala, falls under the purview of the Financial Impact Factor(JCC): 3.6586 - This article can be downloaded from www.impactjournals.us 12 Sreelakshmi C. C Inclusion Programme of South Indian Bank, since 2010. RBI had identified Pullu village from unbanked villages, with less than 2000 population, for developing into a Model Village for delivering financial growth, along with the empowerment of rural population. South Indian Bank entrusted Department of Rural Banking and Finance Management of College of Co- operation Banking and Management, Kerala Agricultural University to conduct a detailed financial assessment survey of villagers in Palau. The detailed survey report of Pullu, enabled the Bank to identify the gaps that existed in the village, in terms of the level of financial literacy, penetration of banking services and other infrastructural requirements in the village. South Indian Bank initiated further steps in the village, based on the findings and inferences from the baseline survey report. South Indian Bank opened an Ultra Small Branch in Palau, on 1st November 2013, an action by which the Bank declared Palau as “Bank’s Own Village”. The need of imparting financial education to villagers was identified, to improve the standard of living of villagers, on the basis of the report of the baseline survey. Under the program, student teams consisting of ten undergraduate and five post graduate students paid visit to the village, for undertaking the baseline survey in the village, followed by Participatory Rural Appraisal (PRA) to take stock of the situation. On the basis of needs assessment identified from the PRA exercise, financial literacy programs were rolled out. Thereafter, South Indian Bank is continuing its efforts to penetrate banking services to the people of Palau. More than two years have been completed after the implementation of the Financial Literacy Program in Palau Village. Hence, it is the apt time to explore whether the program has made any positive change in the banking awareness and banking habits, among the people of the village. Being agriculture dominated village, the effort here is to find out the improvement or positive change, with respect to awareness, availability and usage of selected banking services by farmers, as a result of the Financial Literacy Program, conducted in the Pullu village. OBJECTIVE OF THE STUDY The main objective of the study, is to examine the impact of the Financial Literacy Program on farmers, in the Palau village of Thrissur District. METHODOLOGY OF THE STUDY The Financial Literacy Program (FLP) was conducted in the fourth ward of the Palau village in a Chazhoor Grama Panchayat. Hence, in order to analyze the impact of FLP on farmers, the same word is selected for the study. The study is mainly based on primary data collected, through a semi-structured interview schedule from 60 farmer respondents, who were selected randomly. Information regarding schemes of RBI and GOI for financial inclusion is obtained, from their respective websites. The data collected were analyzed with the help of percentages, indices and paired t-test RESULTS AND DISCUSSIONS The Financial Literacy Program was conducted in the Pullu Village, with the following objectives, viz; to educate the villagers with regard to various financial products and services, available from the formal financial sector; to create awareness about the advantages of being connected with the formal financial sector; and to spread the usage of banking services, among the people by imparting practical knowledge of techno banking. In analyzing the impact of FLP among farmers, four categories of services through banks are considered, viz., Savings bank account, ATM services, mobile banking, and borrowings. Basically the impact of FLP has been assessed by finding out the changes in the awareness and usage levels of each of these services, before and after the program. As a NAAS Rating: 3.10- Articles can be sent to [email protected] Impact of the Financial Literacy Programme on Farmers in Pullu Village 13 prelude to the discussion of the impact of FLP on farmers, a brief picture on the demographic profile of the farmers is given in the ensuing section Table 1: Demographic Profile of Respondent Farmers Sl. No Characteristics No. of respondents Percentage Age (in years) 30-40 10 16.7 40-50 16 26.7 1 50-60 14 23.3 60-70 13 21.7 >70 7 11.6 Total 60 100 Gender Male 43 71.7 2 Female 17 28.3 Total 60 100 Educational status Below SSLC 24 40 3 SSLC 24 40 Plus Two 12 20 Total 60 100 Source: compiled from primary data Impact of Financial Literacy Programme with Respect to Savings Bank Accounts To examine the impact of the Financial Literacy Programmes and to find out whether these awareness campaigns have been fruitful, the awareness level and usage level of respondents about Savings Bank Account, before and after the Programme is examined with the help of awareness index. The awareness level of the farmers, with respect to six features of savings bank account like procedure for opening account, mode of depositing, minimum balance to be maintained, interest on SB account balance, pass book and mode of withdrawal are examined by means of statements and getting scores for each of the statements based on whether they are fully aware, partially aware or not aware, with score values of three, two and one respectively. The individual awareness index was constructed on a three point Likert Scale, as: Individual awareness index = 100 The maximum score is 18, with six statements and maximum individual score of three. The individual awareness index calculated, for each of the respondents are categorised into three classes, viz., ff the Index score is less than 34 percent - Not Aware; If the Index score lies between 34 percent and 67 percent - Partially Aware; If the Index score is more than 67 percent - Fully Aware. The awareness level on savings bank accounts before and after the FLP is measured, and the impact is examined with the help of paired t-test. The details are given in Table 3. Table 2: Awareness Level of Farmers about SB Account Before and After FLP No of Respondents Sl. No Particulars Before FLP After FLP 1. Fully Aware 1 (1.6) 58(96.7) 2. Partially aware 55 (91.7) 2(3.3) Impact Factor(JCC): 3.6586 - This article can be downloaded from www.impactjournals.us 14 Sreelakshmi C. C Table 2 Contd 3. Not aware 4 (6.7) 0 Total 60 (100) 60 (100) Composite index 61.1111 94.4444 t-value 46.875** Sig.(2-tailed) * 0.000 Source: Primary data Note: Figures in parenthesis represent percentage to total Table 3, makes it clear that the FLP conducted at Pullu village has improved the awareness level of farmers, about Savings Bank account.