Small Finance Banks Objectives and Purpose

All three statements correctly describe the purposes of Small Finance Banks (SFBs) in India. SFBs, introduced by the RBI in 2015, were created as part of financial inclusion initiatives to serve underserved segments: (1) They provide credit to small business units (MSMEs); (2) They lend to small and marginal farmers who lack access to traditional banking; (3) They encourage rural entrepreneurship by supporting young entrepreneurs. The RBI's guidelines for SFB licensing specifically mandate that these banks focus on financial inclusion, with a significant portion of their lending portfolio reserved for priority sector lending to agriculture, micro, small, and medium enterprises. > Key Insight: SFBs are designed as inclusive financial institutions targeting MSMEs, farmers, and rural entrepreneurs who are underserved by conventional banks. All three objectives are integral to their regulatory mandate. Answer: (d).