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Based on the broad based issues of financial exclusion among the deprived sections of the people the present study examines the extent of financial exclusion among the socially and economically backwad classes in India with special emphasis on SC and ST households in Kerala. The study also tries to analysis the paradox of financial inclusion and non- inclusive growth in Kerala. The study found that at the macro level, the SC and ST households are still excluded from the formal sector credit. Kerala remained the highest institutional loan lender whereas Assam was placed at the bottom during the post liberalization era. From the field survey in Pathanamthitta district, we found that a good proportion of the SC and ST households in Kerala are still financially excluded. While the SC households depended on different sources of credit, the ST households depended only on cooperative banks. Within financially inclusive households, majority used their credit for non-productive purposes. Even though the Self Help Groups have an important role in shaping the banking habit of poor people, still a major proportion of them rely on the informal sector credit.

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M Phil Scholar at Centre for Development Studies, Thirunananthapuram, Kerala, India. Research interest includes money, banking, trade in agriculture.

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