Financial Inclusion- FINO
Transcript of Financial Inclusion- FINO
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"Ten years ago, my job was to start from scratch and
move the agenda of private sector involvement in
serving the world's poor," he said. "Now I want to start
from the other end, the idea of democratizing
commerce
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"Ten years ago, my job was to start from scratch and
move the agenda of private sector involvement in
serving the world's poor," he said. "Now I want to start
from the other end, the idea of democratizing
commerce
C K Prahalad
Fortune does lie at the bottom of the pyramid, financial
inclusion has to be seen, not patronisingly but as a survival
strategy for banks.
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Financial Inclusion ? ?
Avg. No. of villages served per bank branch 4
Is the distribution equitable ? ?
90% villages dont have a bank branch within 5 km radius
51.4% of 89.3 million farmer households are excluded
from both formal/ informal sources
Only 27% of the total farmer households, access formal
sources of credit
Source: http://mospi.nic.in/mospi_nsso_rept_pubn.htm
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Rich
Middle
Poor
Marked by low financial literacy
Predominantly in rural areas
but also in semi-urban
Mostly not reached by
formal banking system
Narrow product suiteleading to lack of integration
Same channels attempt to
cater to all customer segments
Untapped
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EKO FINO
A little
world
(ALW)
Financial inclusion
services (payments)
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Started in 2006, in Mumbai
Has 40.41 million customer base & Force of 21,527
Transaction points in 397 districts across 24 states.
FINO is the market leader in delivering products and
services to first and last mile.
Customer service centers
Source :http://fino.co.in/
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Banking
Govt
Retail
Insurance
Technology
Ruraluntapped
customers
Accounting and
MIS systems
Point of
transaction terminalsBio metric smart
cards
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Investors
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Customers
22 banks
10 MFI
4 insurance companies
12 Govt entities
40.41 million micro customers
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Product/Service : Banking
Deposits
SHG loans
JLG loans
Recurring deposits
Domestic remittance
Branchless banking
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Products / services
Government
MNREGA
Social security pension
schemes
Retail
Third party service
Micro insurance
Insurance
Rashtriya Swasthya
Bima Yojna
Technology
Hosted solutions
International sales
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Pricing Cost of operations
cost of margins
Three models of pricing
1. FINO fintech
2. Sale of bio-metric cards/ micro deposit machines .
3. Micro-finance system.
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PriceFINO fintech
No of enrollments of
customers to clients
Bulk remittances of
amount into bank
Sales
Sale of Biometric smart
cards & deposit
machines
Operational cost
on disbursement of
NREGA funds
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Micro finance
FINO grown in to self sustainable model
Started giving loans to MFIS & SHG
Evolving 3-4 financial models to lend to
MFIS AND SHGS
RS . 20 / remittance up to 10,000 @ single transaction
for Micro customers
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Place
Branch less banking
Door to door service Rural micro customers
Point of terminal
Paper less insurance
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Promotion
Rural customers
Link with Govt bodies
1. Panchayat body2. Project officer(NREGA)
3. FINO officers
Financial literacy
No frills savings account
Nukad natak- role play
Clients
Low transaction cost
Rs.50 @ Bank / Rs.16@ ATM
/ Rs.4 @BC
Use of Hi technology and
security
Regulatory issues
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In Panchayat
NUKAD NATAK
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People
Business Correspondents employees
Clients - Institutions Micro Customers - 3rd party / Rural untapped
customers / Bottom of pyramid
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Process
Identify & Approach to customer (mostly
untapped)
Bandhus / BCs
Fills Accounting form for any clients bank
Issue of smart card (photograph & finger print)
Agents door step serviceTransactions
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Process ..
Data recorded cross checked @ Dist. HQ
Data stored to computer
Send to Banks Database / Core Banking
System
Insurance
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Physical evidence
Mobile point of sales machines
Micro deposit machines
Smart cards
Issue of receipts after transactions
Mobile phone, web cam, system.
Bandhus uniform
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Bio metric smart card
Transaction
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Mismatch b/w demand and supplyCustomer needs Institutional response
oFinancial Services for household
needs
oOccupation specific credit
oStructure around uneven cash-
flows
oStructured Cash-flows : Regulatory
Compliance
oNo Documentation oComplete Paperwork as per
product / compliance
oTimings as per occupation; bank at
home
oBranch timings
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Blue Print
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CUSTOMER
BC
Lo InPhysical
Lo InIT
Invisible actions
Contact person
Mobile phones,
Biometric machine
Fill form
Thumb impress
Snap
Issue of smart
cards
DATA BASEFINO
CBS
SCRUTINIZE
FORMS
BANK CBS
Blue PrintLine of interaction
Line of Visibility
D
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CUSTOMER
BC
Line of Visibility
Lo InPhysical
Lo InIT
Invisible actions
Contact person
Mobile phones,
Biometric machine
Insert S Card
Thumb impress
DATA BASEFINO
CBS
BANK CBS
SMART CARD
Collection of money
Issue of receipts
BANK
Collection of money from all BCs
Line of interaction
D
E
P
O
SI
T
SFF
W
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Fail points
Thumb impression Age factor / Soiled Hands
Embezzlement / fraud by BC
Waiting time of rural customers to transact with
BCS
Low cash limits of BCs
High cost of Bio metric cards
Red tape by Govt bodies in releasing funds
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Thumb impression / voice
Characters Thumbimpression Voice
Ease of use High High
Error incidence Dryness / dirt / age Noise / coldsAccuracy High High
User acceptance Medium High
Long term stability High Medium
Source : A practical guide to bio metric security technology
High Penetration Mobile phone & 95% accuracy moving
to voice based transactions
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Reliability
BC S meetingcustomers rendering
required service
Highly Secured MIS.
Responsiveness
BC S trained to assist
micro customers
Fill up forms
Visits 3 times a day ofeach village by walk
Quality dimensions
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Assurance
UID Smart card
Using Bio metric thumb
impression machine
Secured usage of
technology
Empathy
No cherry picking ofend users
No charge from end
users
TangiblesIssue of receipts
Bio metric cards
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