Socio-Economic development and sustainable development goals: a roadmap from vulnerability to sustainability through financial inclusion

Sustainable Development Goals (SDGs) highlight the importance of poverty reduction, and call for policy implementation that leads to the socio-economic development of impoverished people. However, there is a lack of knowledge about assessing individual-level socio-economic development, and how financial inclusion through microfinance can contribute to it. Therefore, the role of commercially operated Microfinance Banks (MFBs) is also considered to be controversial in the literature. This study assesses the overall socio-economic development by considering different sustainable livelihoods, multidimensional poverty, living standards, and social development measures. Thus, the Multidimensional Poverty Index (MPI), and Living Standard Index (LSI) have been estimated to gauge poverty and improvements in living standards. Data comprising 503 customers of MFBs, and 500 control respondents, has been gathered through a survey to signify this impact for two years. This paper substantiates that the microfinance obtained from MFBs contributes positively towards sustainable livelihoods, multidimensional poverty reduction, and living standards. However, microfinance does not contribute to social development. Impoverished people, mainly women living in urban areas, reap more benefits from microfinance, than their rural counterparts. Overall, financial inclusion shall be a gateway to achieve the SDGs in the long run through the socio-economic development of an impoverished segment of the society.