LINKING HARMONIOUS CSR AND FINANCIAL INCLUSION: THE MODERATING EFFECTS OF FINANCIAL LITERACY AND INCOME

This study focuses on the effect of Corporate Social Responsibility (CSR) on financial inclusion behavior in rural communities. CSR in the domain of community engagement, education and livelihood initiatives, which are all referred to as 'harmonious CSR' in the paper. This study further explores the moderating influence of financial literacy and income on harmonious CSR-financial inclusion linkages.A field survey of 344 rural households (CSR beneficiaries) was conducted in two districts of Uttar Pradesh, India. This study follows a two-stage approach. First, a theoretical model is constructed on the basis of a strategic review of literature in the field of social science (social work, rural development and development studies). Second, confirmatory factor analysis (CFA) is performed, followed by a hierarchical regression model to determine underlying associations. Findings reveal that harmonious CSR has a significantly positive impact on financial inclusion in the Indian rural sector. The moderating effect of financial literacy is also reflected in CSR-financial inclusion linkages. However, income is not found to have any moderating influence on the relationship between harmonious CSR and financial inclusion. Finally, this study is in favor of deepening the influence of the financial institutions so that policymakers can make informed decisions about maintaining a sustainable economic environment, especially, in the context of the rural sector where such steps are desperately needed.