This document summarizes a study on the financial inclusion of street vendors in Tiruchirappalli District, India. The study examines the socioeconomic background and credit needs of street vendors. It finds that most vendors borrow from moneylenders due to difficulties accessing banks. The study uses surveys and statistical analysis to evaluate differences in income, borrowing amounts, and credit sources between gender and religious groups. It concludes that expanding access to formal credit through training programs and microfinance could aid street vendor entrepreneurship and financial inclusion. Recommendations include skills development by banks, a census of vendors by civic authorities, and advocacy by trade unions to secure credit availability.

1. “A STUDY ON FINANCIAL
INCLUSION OF STREET VENDORS:
WITH SPECIAL REFERENCE TO
TIRUCHIRAPPALLI DISTRICT”.
BY
G.REKA ,
M.com.,M.Phil.,MBA.,M.phil.,
Assistant Professor
Department of Commerce
Jamal Mohamed College

2. INTRODUCTION
• Many issues related to street vendors
have been addressed in the past. Issues which are
related to public space utilisation, granting them
business licences so that they are no more called
“unlawful encroachers”, “nuisances and objects
causing visual pollution” and the like have often
been studied and deliberated. However the
issues surrounding the nature of credit
transactions and financial inclusion for street
vendors have never been discussed at length in
the recent past. This study will therefore be a
benchmark study in its own right.

3. STREET VENDORS
• “Street vendors means a person
engaged in vending of articles, goods, wares, food
items or merchandise of everyday use or offering
services to the general public, in a street, lane,
side walk, footpath, pavements, public park or
any other public place or private area, from a
temporary build up structures or by moving from
place to place and includes hawker, peddler,
squatter and all other synonymous Terms which
may be local or region specific.” (The Street
Vendors( Protection Of Livelihood And Regulation
Of Street Vending) Act,2014 ) .

4. FINANCIAL INCLUSION
• According to Chakraborty (2011), Financial
inclusion is the process of ensuring access to
appropriate financial products and services
needed by all sections of society including
vulnerable groups such as weaker sections
and low income groups at an affordable cost
in a fair and transparent manner by
mainstream institutional players.

5. NEED OF FINANCIAL INCLUSION
According to the United Nations the main goals of inclusive finance are
as follows:
• Access at a reasonable cost of all households and enterprises to the
range of financial services for which they are “bankable,” including
savings, short and long-term credit, leasing and factoring,
mortgages, insurance, pensions, payments, local money transfers
and international remittances.
• Sound institutions, guided by appropriate internal management
systems, industry performance standards, and performance
monitoring by the market, as well as by sound prudential regulation
where required
• Financial and institutional sustainability as a means of providing
access to financial services over time
• Multiple providers of financial services, wherever feasible, so as to
bring cost-effective and a wide variety of alternatives to customers
(which could include any number of combinations of sound private,
non-profit and public providers).

6. OBJECTIVES OF THE STUDY
The objectives of the present study are:
• To understand the concept of financial inclusion.
• To Overview the socio-economic background of
the street vendors.
• To Document the current status of financial
inclusion of street vendors.
• Identify the policy constraints and drivers to the
better adoption of financial services appropriate
to the needs of the street vendors.

7. STATEMENT OF THE PROBLEM
• Financial inclusion is an integral part of inclusive
and sustainable growth process of an economy.
Proper access to finance at an affordable cost to
all the section of the society is a key requisite to
economic growth. In a developing country like
India, a large segment of the society, particularly,
low income people have very little access to
formal financial sector. Thus, the poor people go
to informal sources of credit for their financial
needs even though it’s costly. When the street
vendors approach the banks they are confronted
with various problems. This study is concerned
with the financial inclusion of street vendors in
Tiruchirappalli district.

8. LIMITATIONS OF THE STUDY
The study suffers from the following limitations:
• Time was a major constraint for the project.
• Interaction with respondents was also limited
because of their busy work.
• The sampling is done based on the available
street vendors physically verified by the
researcher where there is no availability of
proper records.
• The street vendors don’t have a permanent place
or shop to sell their products. They are virtually
pushed to the every nook and corner of the town.
Their constant mobility makes the data collection
a difficult process.

9. METHODOLOGY OF THE STUDY:
To carry out the present study, the methodologies that have been adopted are stated as
follows:
i)Type of Research
The present study is descriptive in nature as it aims at describing the status of
street vendors on the accessibility of banking services in Tiruchirappalli city.
Descriptive research methods are pretty much as they sound- they describe
situations. They do not make accurate predictions, and they do not determine
cause and effect.
ii) Sampling
A sample size of 175 is taken and responses are collected in a structured
schedule questionnaire. Researcher has adopted convenience sampling for
determining the sample The schedule questionnaire consist of 25 questions.
iii)Collection Of Data
Primary data were collected from 175 street vendors from
Tiruchirappalli city. The secondary data have been collected from the
annual report, periodicals, journals, magazines, text books, news papers
and websites so on.

10. iv)Data Processing
After completing the collection of data by the researcher prepared for
the
purpose of classifying the data, lastly classification tables were prepared for
further analysis and interpretation of data.
v)Research Gap
Although, lot of studies has been carried out in the area of financial
inclusion, few studies have been carried out in the street vendors.
Therefore, the present study is an attempt to contribute to the financial
inclusion of street vendors.
vi)Tools Used For The Analysis
The data collected through questionnaire has been tabulated and analyzed by
using the following techniques
• Simple Percentage analysis
• F-Test
• Correlation
• ANOVA
• M.S. excel

11. NATURE OF THE VENDORS AND GENDER-WISE
CROSS TABULATION
TYPES OF THE
OCCUPATIONS GENDER TOTAL
MALE FEMALE
Cooked foods 25(18) 07(20) 32(18)
Vegetables & Flower 48(34) 11(32) 59(34)
Fruits 13(9) 02(6) 15(8)
Electronic items 12(9) - 12(7)
Households utensils
and stationary
39(28) 03(9) 42(24)
Garments - 05(15) 5(3)
Lather items 02(1) 01(3) 3(2)
Food 02(1) 05(15) 7(4)
TOTAL 141 34 175

12. Financial accessibility of street vendors
depends on the volume of trade and types of the
product they sold. Street vending profession is
heterogeneity in character and this study
considers only 8 types of the occupations.
Interestingly, the data shows that Most of the
vendors (34 per cent) are vegetable and flower
vendors because this occupation requires very
low investment as compared to other activities. It
is also calculated (not shown) that the profit
margin from vegetables, fruits, and cooked food
is high compared to that from other products, not
taking into account the implicit labor costs .

13. PRINCIPAL AMOUNT OF BORROWING AND
GENDER-WISE CROSS TABULATION
BORROWING GENDER TOTAL
MALE FEMALE
100-5000 13(9) 11(32) 24(14)
5001-10000 97(69) 16(47) 113(65)
10001-20000 15(11) 03(9) 18(10)
20001-30000 10(7) 02(6) 12(7)
30001- 50000 04(3) 01(3) 05(3)
Above 50000 02(1) 01(3) 03(1)
TOTAL 141(81) 34 (19) 175(100)

14. Of the total 175 vendors in the sample
set, 65 per cent borrowed Rs 5001-10000 and
14 per cent borrowed Rs100-5000. Above Rs
50000 were borrowed by one per cent of the
total vendors. In the sample set, as reiterated
earlier, 34 comprise female vendors of 47 per
cent borrow principal amounts between Rs
5001 - Rs10000, followed by 32 per cent who
borrow in the Rs 100-5000 and lowest
percentage of female vendors borrow in the
Rs 30001-50000 and above 50000 range.

15. SOURCE OF CREDIT AND GENDER-WISE
CROSS TABULATION
TYPES OF THE
SOURCES
SOURCES OF
CREDIT GENDER TOTAL
MALE FEMALE
Formal sources Bank 10(7) 12(35) 22(13)
Co-operative 05(5) 03(9) 08(5)
NGO 02(1) - 02(1)
Trade union 03(2) - 03(1)
Informal sources Moneylender 79(56) 07(21) 86(49)
Wholesaler 16(11) 03(9) 19(11)
friends 17(12) - 17(10)
Relatives 09(6) 09(26) 18(10)
TOTAL 141(81) 34(19) 175(100)

16. • Of the total vendors, for 49 per cent the main
source of credit is the money lenders. 13 per
cent for the bank and 11 per cent from
wholesaler , following friends and relatives are
10 per cent.Cooperatives and NGO come next
at 5 per cent and 1 per cent.

17. vii) Hypotheses Of The Study
Hypothesis – 1
H0: There is no significant difference between the
different gender and net income per month
H1: There is a significant difference between the
different gender and net income per month
ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 1326.125 1 1326.125 5.256317 0.061718 5.987378
Within Groups 1513.75 6 252.2917
Total 2839.875 7

18. INFERENCE:
Applying ANNOVA test corresponding F-
value and its p-values were obtained. F-value was
0 and p-value was 1.
F-value was 5. 256317 and p-value was
0.061718. As p-value in above table was more
than 0.05, above null hypothesis was accepted
and concluded that there is no significant
difference between the different gender and net
income per month.

19. Hypothesis – 2
H0: There is no significant difference between the different
Religious Groups and nature of business
H1: There is a significant difference between the different
Religious Groups and nature of business
ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 0 1 0 0 1 18.51282
Within Groups 789 2 394.5
Total 789 3

20. INFERENCE:
Applying ANNOVA test corresponding F-
value and its p-values were obtained. F-value
was 0 and p-value was 1.
As p-value in above table was more than
0.05, above null hypothesis was accepted and
concluded that there is no difference
between the different Religious Groups and
nature of business

21. Hypothesis – 3
H0: There is no significant difference between duration of hours
of work per a day and amount of earning
H1: There is a significant difference between duration of hours
of work per a day and amount of earning
F-Test Two-Sample for Variances
Hours
Amount of earning per
day
Mean 35 27.5
Variance 842 989.9
Observations 5 6
df 4 5
F 0.850591
P(F<=f) one-tail 0.450308
F Critical one-tail 0.159845

22. F-Test Two-Sample for Variances
INFERENCE:
If F> F critical one- tail we rejected
the null hypothesis. This in the case, 0.850591
>0.159845. Therefore we reject the null
hypothesis. Hence There is a significant
difference between duration of hours of
work per a day and

23. MAJOR FINDINGS
On the basis of the foregoing discussion and observations the
following inferences are drawn:
• Majority of 81 percent of the Respondents are male
members in society. This study shows that street vending is
a male-dominated occupation.
• A major portion of the vendors (nearly 45 per cent)
belonged to the age group 26-35 years.
• Of the 175 vendors in the present study, nearly 45 per cent
are completely illiterate.
• In totality, 04 per cent of the total Respondents are
physically challenged vendors.
• Interestingly, the data shows that Most of the vendors (34
per cent) are vegetable and flower vendors because this
occupation requires very low investment as compared to
other activities.
• Out of 175 respondents 13 per cent of the vendors are
engaged in seasonal nature of business.

24. • Vendors spend above 15 hours a day vending,
sometimes to the detriment of their health.
About 49 per cent spend 8 to 12 hours daily,
followed by 20 per cent who spend 5-8 hours
daily.
• The range of male vendors’ monthly income is
much higher than female.
• The major concentration is found in the
expenditure range Rs 9001-12000 (55 per cent).
• The amount of investment of the vendors in the
study revealed that 67 per cent of the vendors
had invested Rs 2501- 5000 in their businesses.

25. • Of the total 175 vendors in the sample set, 65 per
cent borrowed Rs 5001-10000 and 14 per cent
borrowed Rs100-5000.
• Of the total vendors, for 49 per cent the main
source of credit is the money lenders.
• 55 per cent of the sample set takes loans for
business activities.
• The linkages between the money lender and the
vendor get established through a variety of
channels. Nearly 53 per cent of the vendors say
that their fellow vendors had been the link.
• The greatest number of vendors the total vendors
(33 per cent) claim to 58 have there is no fixed
number for taking loan in a year.

26. CONCLUSION
It is an undeniable fact that the informal sector contributes
significantly towards national output (60 per cent of the GDP; NSSO
2004-05) and employment. Turning a blind eye to this sector would
work to the detriment of our country’s development. Street vending
offers a means of livelihood to a huge section of the urban poor and is
an important segment of the urban informal sector. The Government
of India estimates that 10 million persons obtain their livelihood from
this occupation. However, if this number is added to the number of
dependents in vendor families including those to whom money is
remitted money the number of persons dependent on this occupation
would triple. Aiding the expansion of their scale of operations,
encouraging them to be entrepreneurial and at the same time
regulating their activities through rehabilitation and access to cheap
formal credit would be a step forward towards the financial inclusion
of street vendors. There is an urgent need to turn all these discussions
and deliberations into practice.

27. RECOMMENDATIONS
Banks
The banks need to conduct skill development programmes, training
programmes, organise workshops for the uneducated urban poor as how to utilise
the available fund in a proper way minimum wastage. A separate department
should work towards educating them by providing free advice and consultation as
to how they should go about with formal procedures and documentation involved
in bank loans. The microfinance departments of the concerned bank should have
all these facilities.
Civic Authority
Only in one or two cities have they started official census of the vendors, no
data is available till now on the actual number of vendors, issue of licenses, photo
identity cards where ever getting undertaken is proceeding at a very slow pace.
After all these issues are over, the issue of credit accessibility will be taken up. It
means another 5-6 years of usurious capital for the vendors.
Trade Unions
They can play a very important role in securing credit availability for vendors.
Unions in Kolkata and Patna have been fighting pitched battles against evictions
and securing right to public space utilisation for street vendors. They will soon take
up the issue of formal credit accessibility.