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PREDICTING REGULAR SAVING BEHAVIOR OF THE POOR USING DECISION TREES – AN IMPORTANT INPUT TO FINANCIAL INCLUSION IN INDIA

Scholedge International Journal of Management & Development

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Title PREDICTING REGULAR SAVING BEHAVIOR OF THE POOR USING DECISION TREES – AN IMPORTANT INPUT TO FINANCIAL INCLUSION IN INDIA
 
Creator Balasubramanian, Chandrashekhar
 
Subject Banking
Microsavings, Saving regularity, Predictive model, Decision Tree, Saving by the Poor, Saving potential.
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Description Microfinance in India is a rapidly growing industry, focusing however, only on the credit side of finance without an adequate emphasis on Microsavings. There are multi-pronged efforts underway to bring the poor under the ambit of the financial system. Financial literacy efforts are also pursued by NGOs to make the poor understand the importance of savings in their lives. 125 million new bank accounts have been opened as of February 2015 under the new scheme of the government of India, 72% of which show zero balances. Having a savings account is only a first step in the financial inclusion efforts. Getting people to save requires a combination of financial literacy, hand holding and discipline aimed specifically at those who may not save regularly, left to themselves. Towards this end it is important to identify the regular saving potential among the poor. This study has developed a predictive model using decision trees to group the poor into potential regular and non-regular savers. The study was based on survey research administered to 700 respondents in Tamil Nadu, South India. The decision tree is able to predict with 90% accuracy, the regular saving potential among the poor. The paper has strong implications for banks, NGOs and others concerned with microsavings, financial inclusion and financial literacy. Categorizing the poor into potential regular and non-regular savers can enable target group specific efforts which can have symbiotically benefitting outcomes to the poor and the institution.
 
Publisher Scholedge R&D Center
 
Contributor —
 
Date 2015-09-10
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
text/html
 
Identifier http://www.thescholedge.org/index.php/sijmd/article/view/211
 
Source Scholedge International Journal of Management & Development ISSN 2394-3378; Vol 2, No 8 (2015); 16-30
2394-3378
 
Language eng
 
Relation http://www.thescholedge.org/index.php/sijmd/article/view/211/314
http://www.thescholedge.org/index.php/sijmd/article/view/211/320
http://www.thescholedge.org/index.php/sijmd/article/view/211/321
 
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Rights Copyright (c) 2015 SCHOLEDGE INTERNATIONAL JOURNAL OF MANAGEMENT & DEVELOPMENT ISSN 2394-3378
http://creativecommons.org/licenses/by-nc/4.0