Challenges to Financial Inclusion in Manipur

Alongside its achievements, Manipur faces challenges that are typical of a hilly, sparsely connected north-eastern state and that make financial inclusion harder to deliver than in the plains.

• Difficult terrain. Much of Manipur is hilly, and many villages are scattered across remote uplands. Setting up and running a full bank branch in such places is costly, so banking density has remained lower than the national average.
• Poor connectivity. Weak road links, and uneven electricity and internet/mobile network coverage in interior areas, limit both the physical reach of branches and the use of digital and app-based banking that could otherwise leap over the distance problem.
• Low credit off-take. North-eastern and hilly states, Manipur among them, have tended to record comparatively low credit–deposit ratios, meaning local savings are not fully turned into local loans and investment.
• Socio-cultural and awareness factors. Limited financial literacy and, in some communities, unfamiliarity with formal banking slow the take-up and active use of accounts, leaving some accounts dormant even after they are opened.
• Dependence on informal credit. Where formal credit is thin, households may still fall back on informal lenders. …