Description
. It answers the questions why financial inclusion is required, who are excluded from financial exclusion. What are the initiatives taken by Indian government for promoting financial exclusion. It also gives case studies on financial exlusion e choupal, SEWA bank in gujarat, SBI's e-gram projec
FINANCIAL INCLUSION
…..bringing banking services to the poor
(An Indian perspective)
Financial Inclusion Defined
“The process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream Institutional players.” - C.Rangarajan Committee (2008)???
Components of Financial Inclusion • • • • • • • • Bank accounts – check in account Savings products Insurance - Healthcare Immediate Credit Remittances & Payment services Mortgage Financial advisory services Entrepreneurial credit
Why Financial Inclusion?
• Sustaining equitable and inclusive growth • Provide economic opportunities to the poor • Insuring the poor against income shocks, emergencies and usurious money lenders. • Ease of government payments through EBT method. • True globalization of financial system • Provides a sense of identity, status and empowerment • At the aggregate level, help banks manage liquidity risks and asset-liability mismatches. • Regulator benefits – transparency and efficiency
Who are excluded?
• • • • • • • • • Poor Socially under-privileged Disabled Old as well as children Women Uneducated Ethnic Minorities Un-employed Self Employed etc.
Causes of Financial Exclusion
• Demand-side Barriers
– Cultural factors – Mistrust of financial institutions – Level of income – Financial illiteracy
• Supply-side Barriers
– Locational constraints – Real and perceived risk in lending – Financial viability of MFIs
Consequences of Financial Exclusion
• difficulties in gaining access to credit • general decline in investment • increased unemployment • losses to small business • it can lead to social exclusion.
Financial Exclusion in India
(Estimates based on various studies and Market Surveys,2009) • Check in accounts - 40% • Life Insurance - 10.0% • Non-Life Insurance - 0.6% • Credit Card - 2% • ATM + Debit Card - 13% • Geographical coverage • 5.2% villages are having a bank branch • Farmers coverage– Out of 119 million farmers, small and marginal farmers are 97.7 million (82.1 %)
Initiatives for Promoting Financial Inclusion
• 1904 Cooperative Societies Act Rural Credit Survey Committee State Bank fo India created for rural penetration 19 Commercial Bank Nationalised, All India Rural Credit Review Committee Lead Bank Scheme - States/Districts Regional Rural Bank - Hybrid banks 6 more Commercial Banks nationalised Self Help Groups - Bank Linkage Programme Kisan Credit Card / Swarojgar Credit Card / Gramin Tatkal Card Committee on Financial Inclusion Set up • 1954 • 1955 • 1969 • 1970 • 1975 • 1981 • 1992 • 2001 • 2006 -
Financial Infrastructure in Rural India
• • • • • • Commercial banks branches Regional rural banks Primary agricultural credit societies Urban cooperative banks Post Offices MFIs, SHGs
Some key statistics
•
• • •
• • • •
• •
Banking sector in India currently caters to about 2.4 crore clients (2% of population)??? 60% coverage of banking services in urban pockets as against 39% in rural pockets Regional disparity is large Only 5.2 percent of India’s villages have bank branches even though 39.7 percent of the total branches are in rural areas Population covered by each branch has come down from 63,000 in 1969 to 16,000 in 2007 Total number of check-in accounts has risen from 454.6 million to 610.3 million 80 percent of the population is without life insurance, health insurance, non-life insurance cover In April 2009, India had around 403 million mobile users but about 46% of them, or 187 million, did not have bank accounts Number of loan accounts just 14% of entire population Proportion of people having any kind of life insurance cover is as low as 10 per cent
(Source: RBI Annual Publication)???
(Source: RBI Annual Publication)???
Index of Financial Inclusion (IFI)???
• Proposed by Ms Mandira Sharma, ICRIER • Measured in 100 countries • A multi-dimensional index, captures information on various dimensions • Easy to compute and is comparable across countries • Three basic dimensions – Banking Penetration, Availability of Banking Services and Usage of Banking System • India ranked poorly, below African countries like Kenya and Morocco – ranked 50th much below China but above Russia considering number of bank branches, ATMs, people served, amounts of bank deposits and credit
Financial Inclusion & Development indicator
Data shows that there is a high correlation between financial exclusion and poverty
Country Composite index of financial inclusion (percent of population with access to financial services)??? Poverty (percent of population below poverty line)???
India
Bangladesh Brazil China Indonesia Korean Republic Malaysia Philippines
48
32 43 42 40 63 60 26
28.6 (1999-00)???
49.8(2000)??? 22.0(1998)??? 4.6(1998)??? 27.1(1999)???
15.5(1989)??? 36.8(1997)???
Sri Lanka
Thailand Source : World Bank (2006) and (2008)???
59
59
25.0(1995-96)???
13.1(1992)???
RBI’s Efforts
• • • • • • • • • • No Frills Accounts General Purpose Credit Card (GCC) for easier credit Simpler KYC Norms Overdraft in Saving Bank Accounts BC / BF Model KCC / GCC Guidelines Electronic Benefit Transfer (EBT) for NREGA payments Financial inclusion drive targeting one district in each state for 100% financial inclusion Business Correspondent Model Banks provide insurance cover for life, disability and health
•
• • • • • • •
One-Time Settlement (OTS) for overdue loans up to Rs. 25000
Liberalised branch expansion Liberalised policy for ATM Introducing technology products and services, Pre-Paid cards, Mobile Banking etc. Allowing RRBs’ / Co-operative banks to sell Insurance and Financial Products Financial Literacy Program Creation of Special Funds 431 districts identified by the SLBC convenor banks for 100 per cent financial inclusion across various States/UTs and the target in 204 districts of 21 States and 7 UTs has reportedly been achieved
Progress
? No-Frill Accounts – 28.23 million(as on Dec.31, 2008)??? ? Rural bank branches – 31,727 constituting 39.7% of total bank branches (as on June. 31, 2009)??? ? Number of ATMs – 44,857 (as on May 31, 2009)??? ? Number of POS – 4,70,237 (as on May 31, 2009)??? ? Number of Cards – 167.09 million (as on May 31, 2009)??? ? Kisan Credit cards – 76 million ? Number of Mobile phones–403 million (as on Apr.30, 2009) out of which 187 million (46%) do not have a bank account (Source: Cellular Operators Association of India)
(Source : RBI Annual Report, CMIE Publication 2009)???
NABARD
• • • • • • • Facilitate credit flow for promotion and development of agriculture, small-scale industries and rural crafts Evaluates, monitoring and inspecting the client banks Acts as a coordinator in the operations of rural credit institutions Initiates measures toward institution-building for improving absorptive capacity of the credit delivery system Providing credit facilities to issuing organizations Monitoring the flow of ground level rural credit Plays a developmental, supervisory and capacity building institution in the area of rural finance
Micro Finance
Microfinance is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and other financial services. Objective: Provide permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers to as many poor and near-poor households as possible
Source: Microfinance India State of the Sector Report, N Srinivasan
• • •
Banks do not provide financial services, such as loans to clients with little or no cash income because of the costs and risk involved Poor people have few assets that can be secured by a bank as collateral Poor people borrow from informal moneylenders and save with informal collectors
•
• • • • • •
Microfinance helps raise income, build up assets and/or cushion themselves against external shocks
Permanent local institutions are built Integrates poor into country's financial system Women are primary focus of credit facilities Very high interest rates : 24% to 36% Entails high risk of credit default though data points otherwise : around 95% recovery rate in India Countries like Bangladesh and Brazil are pioneers
Regional Rural Banks (RRBs)???
• • • • • • Better outreach compared to scheduled commercial banks Account for 37% of total rural offices of all scheduled commercial banks 91% of their workforce is posted in rural and semi-urban areas Account for 31% of deposit accounts and 37% of loan accounts in rural areas RRB’s have a large presence in regions marked by financial exclusion of a high order like North East, Eastern and Central regions Merger of weak RRBs to enhance their capacity and reach
(Source: Committee on Financial Inclusion, 2008)???
Self Help Groups (SHGs)???
SHGs are small group of rural poor who volunteer to form a group for social and economic upliftment of the members • • • • • • • • Homogenous group of about 15-20 women Every member to save small amounts regularly These funds are then used for lending either to its members or others Provide collateral free loans Group members use collective wisdom and peer pressure to ensure timely repayment Interest rates are high Seen as vehicles of leadership and rural entrepreneurship Major NGO participation involved
SHG Bank Linkage Programme (SBLP)???
? NABARD trains the members to maintain simple accounts of the collected
thrift and loans given to members
? Regular meeting with the SHG members to train them and resolve issues ? Savings account is opened with a bank branch ? Regular thrift collection and loaning to members build up the financial
discipline among the members
? Banks can then provide larger loans to the group thus widening the
outreach of microfinance
(Source: NABARD Status of Microfinance in India 2006-07)???
Role of Technology
• • • • • • • Technology can bridge the physical distance between the bank / service provider and the customer Brings down the cost of providing these services Multiple products can be offered through the same delivery channel Reliable and uninterrupted connectivity Security and authenticity of transactions Makes customization of service and delivery possible Makes imparting Financial education easier
25
Technology Solutions being tried in India
• • • • • Smart card, hand held terminal, central CPU Low cost ATMs Mobile Phone Banking SMS Banking Public Call Office (PCO) Connectivity
•
Point of Sales (PoS) devices
26
Challenges
•Mainstreaming savings agenda in microfinance
•Upgrading internal systems to ensure quality of growth •Readying HR to meet the large needs •Funds flow for medium & small MFIs (esp. equity) •Keeping banks and NGOs interested in SHG model •Dealing with the meltdown and liquidity squeeze •State sponsored federations of SHGs –how to make them responsive
• Taking the inclusion agenda beyond blessing of a bank account • Product diversity in loans • Product development in micro-insurance • Regulation –changes to improve institutional response to clients • Client protection and education • Enabling quality service institutions to support growth of the sector
Implications of Financial Exclusion
• • Scaling up of activities Transaction cost too high
•
• • •
Appropriate business model yet to evolve
BC model too restrictive Limitation of cash delivery points Lack of Interest / Involvement of Big Technology Players
•
• •
Lost or neglected opprtunity of business
A major chunk of population in a country like India are excluded Exclusion means denial of good quality credit to farmers and small industries in the unorganised sector thus stifling growth in these sectors
•
•
Availabilty of financial infrastructure at the rural level brings down costs like transportation, transaction costs etc
Social upliftment of those who are backward gets stunted Barrier to sustainable economic growth
29•
•
Socio-economic inequities and regional imbalances
Rangarajan committee's Recommendations
• • • • • Savings product suited to the seasonal income pattern of rural households Money transefer arrangements Life and Non-Life insurance Small Credit Open at least 250 new accounts in each branch every year
•
• • •
Even individuals should be appointed as banking correspondents
Launching a National Rural Financial Inclusion Plan (NRFIP)??? 50% of excluded households to be covered by 2012, rest by 2015 Setting up of two funds – Financial Inclusion Fund and Financial Inclusion Technology Fund - with a corpus of Rs 500 crore each
30
Budget 2010
• • • • • • RBI considering allowing new players into banking to increase geographic coverage Allocation to Micro-Finance Development and Equity Fund doubled to Rs. 400 crore Allocation to FIF and FITF increased by Rs 100 crore each Emphasis on Business Correspondent model: coverage extended to include insurance and other products Increased focus on the northeastern and eastern region Allocation of 1900 Cr to UID authority
31
Way Forward: Recommendations
• • • • • Gov should focus on increasing financial literacy amongst rural populace Banks may franchise into other segments like RRBs Vernacular technologies should be developed Providing banking licenses to more NBFCs to increase coverage Ensuring effectiveness of the BC model
•
Integration of UID with financial inclusion
32
Case Studies
• • • e- choupal SEWA bank in Gujarat SBI's e-Gram project
33
E-Choupal…harnessing the power of ICTs to empower
Indian farmers
Partnership (2-way)
Private Sector (ITC Limited)/ Community (Farmers in Rural India)
Technology Components
?Information
Benefits to the Community
Primary ?Real-time information on Ag markets ?Analysis of national & international trends in Ag markets ?Best Practices in farming techniques and procurement Secondary ?Use by school children ?Promotion of rural insurance
Development Outcome
Villages connected: 21,000 Farmers empowered: 2.1 Million Number of installations: 4,100 Increase in soya production: 50% to 80% Decrease in sales to Agents: 50% Higher return for produce, lower cost for inputs, directly accruing to farmers
kiosks
PC/ VSAT ?Web portals (Hindi) ?Smart cards ?Office Software Cost to farmers None Cost to ITC $3,000-6,000 per installation $100 per year in maintenance
Run by a Sanchalak (a lead farmer elected by the community and trained by ITC)
Mahila SEWA Bank…
A POOR INFORMAL SECTOR WOMEN’S BANK BASED IN WESTERN INDIA SERVING MORE THAN 3,00,000 WOMEN WORKERS
SERVICES
? SAVINGS
? CREDIT
? INSURANCE ? FINANCIAL COUNSELLING ? MICRO PENSION ? HOUSING FINANCE
SBI’s e-gram project
doc_441816087.pptx
. It answers the questions why financial inclusion is required, who are excluded from financial exclusion. What are the initiatives taken by Indian government for promoting financial exclusion. It also gives case studies on financial exlusion e choupal, SEWA bank in gujarat, SBI's e-gram projec
FINANCIAL INCLUSION
…..bringing banking services to the poor
(An Indian perspective)
Financial Inclusion Defined
“The process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream Institutional players.” - C.Rangarajan Committee (2008)???
Components of Financial Inclusion • • • • • • • • Bank accounts – check in account Savings products Insurance - Healthcare Immediate Credit Remittances & Payment services Mortgage Financial advisory services Entrepreneurial credit
Why Financial Inclusion?
• Sustaining equitable and inclusive growth • Provide economic opportunities to the poor • Insuring the poor against income shocks, emergencies and usurious money lenders. • Ease of government payments through EBT method. • True globalization of financial system • Provides a sense of identity, status and empowerment • At the aggregate level, help banks manage liquidity risks and asset-liability mismatches. • Regulator benefits – transparency and efficiency
Who are excluded?
• • • • • • • • • Poor Socially under-privileged Disabled Old as well as children Women Uneducated Ethnic Minorities Un-employed Self Employed etc.
Causes of Financial Exclusion
• Demand-side Barriers
– Cultural factors – Mistrust of financial institutions – Level of income – Financial illiteracy
• Supply-side Barriers
– Locational constraints – Real and perceived risk in lending – Financial viability of MFIs
Consequences of Financial Exclusion
• difficulties in gaining access to credit • general decline in investment • increased unemployment • losses to small business • it can lead to social exclusion.
Financial Exclusion in India
(Estimates based on various studies and Market Surveys,2009) • Check in accounts - 40% • Life Insurance - 10.0% • Non-Life Insurance - 0.6% • Credit Card - 2% • ATM + Debit Card - 13% • Geographical coverage • 5.2% villages are having a bank branch • Farmers coverage– Out of 119 million farmers, small and marginal farmers are 97.7 million (82.1 %)
Initiatives for Promoting Financial Inclusion
• 1904 Cooperative Societies Act Rural Credit Survey Committee State Bank fo India created for rural penetration 19 Commercial Bank Nationalised, All India Rural Credit Review Committee Lead Bank Scheme - States/Districts Regional Rural Bank - Hybrid banks 6 more Commercial Banks nationalised Self Help Groups - Bank Linkage Programme Kisan Credit Card / Swarojgar Credit Card / Gramin Tatkal Card Committee on Financial Inclusion Set up • 1954 • 1955 • 1969 • 1970 • 1975 • 1981 • 1992 • 2001 • 2006 -
Financial Infrastructure in Rural India
• • • • • • Commercial banks branches Regional rural banks Primary agricultural credit societies Urban cooperative banks Post Offices MFIs, SHGs
Some key statistics
•
• • •
• • • •
• •
Banking sector in India currently caters to about 2.4 crore clients (2% of population)??? 60% coverage of banking services in urban pockets as against 39% in rural pockets Regional disparity is large Only 5.2 percent of India’s villages have bank branches even though 39.7 percent of the total branches are in rural areas Population covered by each branch has come down from 63,000 in 1969 to 16,000 in 2007 Total number of check-in accounts has risen from 454.6 million to 610.3 million 80 percent of the population is without life insurance, health insurance, non-life insurance cover In April 2009, India had around 403 million mobile users but about 46% of them, or 187 million, did not have bank accounts Number of loan accounts just 14% of entire population Proportion of people having any kind of life insurance cover is as low as 10 per cent
(Source: RBI Annual Publication)???
(Source: RBI Annual Publication)???
Index of Financial Inclusion (IFI)???
• Proposed by Ms Mandira Sharma, ICRIER • Measured in 100 countries • A multi-dimensional index, captures information on various dimensions • Easy to compute and is comparable across countries • Three basic dimensions – Banking Penetration, Availability of Banking Services and Usage of Banking System • India ranked poorly, below African countries like Kenya and Morocco – ranked 50th much below China but above Russia considering number of bank branches, ATMs, people served, amounts of bank deposits and credit
Financial Inclusion & Development indicator
Data shows that there is a high correlation between financial exclusion and poverty
Country Composite index of financial inclusion (percent of population with access to financial services)??? Poverty (percent of population below poverty line)???
India
Bangladesh Brazil China Indonesia Korean Republic Malaysia Philippines
48
32 43 42 40 63 60 26
28.6 (1999-00)???
49.8(2000)??? 22.0(1998)??? 4.6(1998)??? 27.1(1999)???
15.5(1989)??? 36.8(1997)???
Sri Lanka
Thailand Source : World Bank (2006) and (2008)???
59
59
25.0(1995-96)???
13.1(1992)???
RBI’s Efforts
• • • • • • • • • • No Frills Accounts General Purpose Credit Card (GCC) for easier credit Simpler KYC Norms Overdraft in Saving Bank Accounts BC / BF Model KCC / GCC Guidelines Electronic Benefit Transfer (EBT) for NREGA payments Financial inclusion drive targeting one district in each state for 100% financial inclusion Business Correspondent Model Banks provide insurance cover for life, disability and health
•
• • • • • • •
One-Time Settlement (OTS) for overdue loans up to Rs. 25000
Liberalised branch expansion Liberalised policy for ATM Introducing technology products and services, Pre-Paid cards, Mobile Banking etc. Allowing RRBs’ / Co-operative banks to sell Insurance and Financial Products Financial Literacy Program Creation of Special Funds 431 districts identified by the SLBC convenor banks for 100 per cent financial inclusion across various States/UTs and the target in 204 districts of 21 States and 7 UTs has reportedly been achieved
Progress
? No-Frill Accounts – 28.23 million(as on Dec.31, 2008)??? ? Rural bank branches – 31,727 constituting 39.7% of total bank branches (as on June. 31, 2009)??? ? Number of ATMs – 44,857 (as on May 31, 2009)??? ? Number of POS – 4,70,237 (as on May 31, 2009)??? ? Number of Cards – 167.09 million (as on May 31, 2009)??? ? Kisan Credit cards – 76 million ? Number of Mobile phones–403 million (as on Apr.30, 2009) out of which 187 million (46%) do not have a bank account (Source: Cellular Operators Association of India)
(Source : RBI Annual Report, CMIE Publication 2009)???
NABARD
• • • • • • • Facilitate credit flow for promotion and development of agriculture, small-scale industries and rural crafts Evaluates, monitoring and inspecting the client banks Acts as a coordinator in the operations of rural credit institutions Initiates measures toward institution-building for improving absorptive capacity of the credit delivery system Providing credit facilities to issuing organizations Monitoring the flow of ground level rural credit Plays a developmental, supervisory and capacity building institution in the area of rural finance
Micro Finance
Microfinance is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and other financial services. Objective: Provide permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers to as many poor and near-poor households as possible
Source: Microfinance India State of the Sector Report, N Srinivasan
• • •
Banks do not provide financial services, such as loans to clients with little or no cash income because of the costs and risk involved Poor people have few assets that can be secured by a bank as collateral Poor people borrow from informal moneylenders and save with informal collectors
•
• • • • • •
Microfinance helps raise income, build up assets and/or cushion themselves against external shocks
Permanent local institutions are built Integrates poor into country's financial system Women are primary focus of credit facilities Very high interest rates : 24% to 36% Entails high risk of credit default though data points otherwise : around 95% recovery rate in India Countries like Bangladesh and Brazil are pioneers
Regional Rural Banks (RRBs)???
• • • • • • Better outreach compared to scheduled commercial banks Account for 37% of total rural offices of all scheduled commercial banks 91% of their workforce is posted in rural and semi-urban areas Account for 31% of deposit accounts and 37% of loan accounts in rural areas RRB’s have a large presence in regions marked by financial exclusion of a high order like North East, Eastern and Central regions Merger of weak RRBs to enhance their capacity and reach
(Source: Committee on Financial Inclusion, 2008)???
Self Help Groups (SHGs)???
SHGs are small group of rural poor who volunteer to form a group for social and economic upliftment of the members • • • • • • • • Homogenous group of about 15-20 women Every member to save small amounts regularly These funds are then used for lending either to its members or others Provide collateral free loans Group members use collective wisdom and peer pressure to ensure timely repayment Interest rates are high Seen as vehicles of leadership and rural entrepreneurship Major NGO participation involved
SHG Bank Linkage Programme (SBLP)???
? NABARD trains the members to maintain simple accounts of the collected
thrift and loans given to members
? Regular meeting with the SHG members to train them and resolve issues ? Savings account is opened with a bank branch ? Regular thrift collection and loaning to members build up the financial
discipline among the members
? Banks can then provide larger loans to the group thus widening the
outreach of microfinance
(Source: NABARD Status of Microfinance in India 2006-07)???
Role of Technology
• • • • • • • Technology can bridge the physical distance between the bank / service provider and the customer Brings down the cost of providing these services Multiple products can be offered through the same delivery channel Reliable and uninterrupted connectivity Security and authenticity of transactions Makes customization of service and delivery possible Makes imparting Financial education easier
25
Technology Solutions being tried in India
• • • • • Smart card, hand held terminal, central CPU Low cost ATMs Mobile Phone Banking SMS Banking Public Call Office (PCO) Connectivity
•
Point of Sales (PoS) devices
26
Challenges
•Mainstreaming savings agenda in microfinance
•Upgrading internal systems to ensure quality of growth •Readying HR to meet the large needs •Funds flow for medium & small MFIs (esp. equity) •Keeping banks and NGOs interested in SHG model •Dealing with the meltdown and liquidity squeeze •State sponsored federations of SHGs –how to make them responsive
• Taking the inclusion agenda beyond blessing of a bank account • Product diversity in loans • Product development in micro-insurance • Regulation –changes to improve institutional response to clients • Client protection and education • Enabling quality service institutions to support growth of the sector
Implications of Financial Exclusion
• • Scaling up of activities Transaction cost too high
•
• • •
Appropriate business model yet to evolve
BC model too restrictive Limitation of cash delivery points Lack of Interest / Involvement of Big Technology Players
•
• •
Lost or neglected opprtunity of business
A major chunk of population in a country like India are excluded Exclusion means denial of good quality credit to farmers and small industries in the unorganised sector thus stifling growth in these sectors
•
•
Availabilty of financial infrastructure at the rural level brings down costs like transportation, transaction costs etc
Social upliftment of those who are backward gets stunted Barrier to sustainable economic growth
29•
•
Socio-economic inequities and regional imbalances
Rangarajan committee's Recommendations
• • • • • Savings product suited to the seasonal income pattern of rural households Money transefer arrangements Life and Non-Life insurance Small Credit Open at least 250 new accounts in each branch every year
•
• • •
Even individuals should be appointed as banking correspondents
Launching a National Rural Financial Inclusion Plan (NRFIP)??? 50% of excluded households to be covered by 2012, rest by 2015 Setting up of two funds – Financial Inclusion Fund and Financial Inclusion Technology Fund - with a corpus of Rs 500 crore each
30
Budget 2010
• • • • • • RBI considering allowing new players into banking to increase geographic coverage Allocation to Micro-Finance Development and Equity Fund doubled to Rs. 400 crore Allocation to FIF and FITF increased by Rs 100 crore each Emphasis on Business Correspondent model: coverage extended to include insurance and other products Increased focus on the northeastern and eastern region Allocation of 1900 Cr to UID authority
31
Way Forward: Recommendations
• • • • • Gov should focus on increasing financial literacy amongst rural populace Banks may franchise into other segments like RRBs Vernacular technologies should be developed Providing banking licenses to more NBFCs to increase coverage Ensuring effectiveness of the BC model
•
Integration of UID with financial inclusion
32
Case Studies
• • • e- choupal SEWA bank in Gujarat SBI's e-Gram project
33
E-Choupal…harnessing the power of ICTs to empower
Indian farmers
Partnership (2-way)
Private Sector (ITC Limited)/ Community (Farmers in Rural India)
Technology Components
?Information
Benefits to the Community
Primary ?Real-time information on Ag markets ?Analysis of national & international trends in Ag markets ?Best Practices in farming techniques and procurement Secondary ?Use by school children ?Promotion of rural insurance
Development Outcome
Villages connected: 21,000 Farmers empowered: 2.1 Million Number of installations: 4,100 Increase in soya production: 50% to 80% Decrease in sales to Agents: 50% Higher return for produce, lower cost for inputs, directly accruing to farmers
kiosks
PC/ VSAT ?Web portals (Hindi) ?Smart cards ?Office Software Cost to farmers None Cost to ITC $3,000-6,000 per installation $100 per year in maintenance
Run by a Sanchalak (a lead farmer elected by the community and trained by ITC)
Mahila SEWA Bank…
A POOR INFORMAL SECTOR WOMEN’S BANK BASED IN WESTERN INDIA SERVING MORE THAN 3,00,000 WOMEN WORKERS
SERVICES
? SAVINGS
? CREDIT
? INSURANCE ? FINANCIAL COUNSELLING ? MICRO PENSION ? HOUSING FINANCE
SBI’s e-gram project
doc_441816087.pptx