A study on Financial Inclusion and its impact on business strategy of street vendors in Mumbai city

Murugan Nadar; Sridhara Shetty

Abstract

The study examines the influence of financial inclusion on the business strategies of street vendors in Mumbai city. By analyzing factors such as access to credit, adoption of digital payments, and participation in government schemes, the research highlights how financial services enhance business growth. The findings show that vendors with access to financial services experience higher sales, increased customer retention, and improved income stability. Despite these benefits, barriers such as complex loan approval processes and limited financial literacy persist. The study suggests targeted policy interventions and improves financial accessibility to support the sustainable growth of street vendors. The study finds that street vendors who engage with financial services often witness significant enhancements in their business operations, including higher daily revenues, stronger customer loyalty driven by digital payment options, and greater income stability. Access to credit empowers them to expand their inventory and improve infrastructure, while digital transactions help attract a wider range of customers in an increasingly cashless market. Despite these advantages, the research highlights persistent obstacles, such as complicated loan procedures, lack of collateral, and inadequate knowledge of available financial tools. A considerable number of vendors remain outside the formal financial system due to poor financial literacy and skepticism towards financial institutions. To address these issues, the study advocates for customized policy measures, educational initiatives to build financial capabilities, and streamlined processes that enhance financial access. These steps are essential for promoting inclusive growth and ensuring the long-term viability of street vendor businesses in urban centers like Mumbai.