IJSRP, Volume 4, Issue 1, January 2014 Edition [ISSN 2250-3153]
Financial sector has witnessed many changes over the last few decades. The economic development of a country is correlated with the financial sector. For the growth of financial sector the participation of every individual of a country is needed that is reflected in the motive of financial inclusion. Since in developing countries or LCDs large proportion of population is dependent on agriculture, but in most of rural areas of these countries financial intermediation has a poor performance and is unable to meet sustainable development. Financial inclusion at a broader level for poor is still a dream for most of the countries. Financial innovation therefore may be the only way to make financial facility available for poor at all levels of income. Some of these products are especially designed targeting the poor. New financial products for poor will be able to remove poverty in rural areas and can play a crucial role in socio-economic change in the rural society. This paper discusses literature review of financial innovation, its impact on rural areas and discusses how some of the innovative financial products helped in financial inclusion for poor people. Moreover it reflects use of technological advancement for innovative financial products that helped in financial inclusion and poverty alleviation. It also gives some suggestions for new financial products to bring more rural poor people in the ambit of financial inclusion for their financial needs. The data and facts used is secondary data from world bank and other agencies reports.