Financial Inclusion Through Mutual Fund Analysisng The Potential And Challenges In Rural Western Uttar Pradesh

Abstract

The rapid evolution of India’s financial ecosystem has expanded the scope of financial inclusion beyond traditional banking toward market-based instruments such as mutual funds. This study explores the potential and challenges of financial inclusion through mutual funds in rural Western Uttar Pradesh, a region with significant untapped investment capacity. Using a mixed-methods approach, data were collected from 400 rural respondents across five districts through structured questionnaires and semi-structured interviews. The study applies Structural Equation Modeling (SEM) to examine the influence of financial literacy, perceived risk, accessibility, and attitude on mutual fund investment intentions. Findings reveal that financial literacy and accessibility significantly enhance rural investors’ willingness to invest, while perceived risk and lack of trust remain major deterrents. Digital integration, through fintech platforms and simplified onboarding processes, emerged as a crucial enabler of participation. The research underscores the necessity of localized financial education, regulatory support, and technology-driven distribution models to achieve deeper inclusion. This study contributes to the discourse on inclusive finance by demonstrating how mutual funds can function as effective instruments of wealth democratization in semi-urban and rural India.