ARTIFICIAL INTELLIGENCE AS A CATALYST FOR FINANCIAL INCLUSION: A CASE STUDY OF MANDSAUR DISTRICT

Abstract

This study examines the role of Artificial Intelligence (AI) as a catalyst for financial inclusion in Mandsaur District during the period 2020–2026. The primary objective is to evaluate how AI-enabled financial technologies have improved access to formal banking services, digital transactions, and credit facilities among rural and semi-urban populations. The research specifically investigates whether AIdriven solutions such as automated credit scoring, chatbots, biometric authentication, and predictive analytics have reduced financial exclusion and enhanced financial literacy. A mixed-method research design was adopted using original primary data collected from 320 households across rural and urban areas of Mandsaur District. Stratified random sampling was employed to ensure representation across income groups and demographic categories. Data were gathered through structured questionnaires, in-depth interviews with banking officials and fintech service providers, and focus group discussions. Quantitative data were analyzed using descriptive statistics, correlation analysis, and regression models, while qualitative data were examined using thematic analysis. The findings indicate a significant increase in banking penetration (from 52% in 2020 to 81% in 2026), digital transaction usage (from 18% to 67%), and AI-based credit approvals (from 4% to 38%). Statistical analysis reveals a positive and significant relationship between AI adoption and financial inclusion indicators. The study concludes that AI-driven financial services have substantially improved accessibility, affordability, and efficiency of financial systems in the district. Policy implications suggest the need for stronger digital infrastructure, AI literacy programs, regulatory support, and targeted outreach initiatives to ensure inclusive and sustainable financial development.