MSSRF FOUNDATION

Roll of Policy for ICT Enabled

Development.

29th October 2012

Santanu Sengupta ACMFI African Centre for Mobile Financial Inclusion santanu@acmfi.org acmfi2010@gmail.com

o Financial Inclusion has been the buzz word

for the governments , across the world, since the onset of the global financial crisis.

o Developed world are revisiting crisis after crisis. It’s now the beholden duty for developing nations led by BRICS & South Africa

To keep the growth wheel churning for the stability of the world

o There is renewed backlash as S&P downgrading US & Europe is revisited with crisis looming in mainland Euro zone

ICT usage deepening will help attaining a comparative financial inclusion at an

affordable, timely and efficient manner where even the most laggard sections

have adopted the services quickly, contributing to social capital asset in the form

of saved transaction costs, optimising services and liquidity acceleration in

compounded return in savings, resulting in tangible GDP growth.

Experiments show different platforms and designs amidst the varying regulatory

norms indulged in innovative proliferation of mobile money in many forms.

Kenya’s M pesa to M Kesho journey have been outstanding, with remittances

within the country touching almost unprecedented scale, contributing almost

10% to over all GDP.

This experiment was carried out in the most structured manner in Brazil as far

back in 1999-2000 in their successful usage of the Postal Union & agent led

models in ushering in the much needed CCTs.

During the crisis as we are trying to replicate it here in the form of MNREGA

and now Direct Cash transfers, in order to save transaction cost, subsidy, and

most of all to plug the Leakages . .

Having a bank account does not mean financial inclusion for the marginalised community, but it’s a fact that with more disposable income the have-nots move up in the social stratum and financial need and spending increase

It is uniformly acknowledged that the financial needs and usage start from the tiniest of transactions in the lowest stratum of the society in the developing or developed nations - in the form of transfers and purchases as a medium of exchange from the earliest days of civilisation since ‘barter.

Today big developing nations are still, cash based society. Those professing to go Cashless gradually, as in UK , are about to shelve cheques by 2014, and forced to defer till 2019 in shelving the agenda altogether to revisit the same at a later date.

Financial inclusion is as varied from CGAP to our own by the venerable Dr Rangarajan Committee’s definition in a broader sense as - access to credit, as per their need, timeliness and at a cost affordable to them. Of course the price discovery of such services vary from one nation to another, as per PPP parameters

In the developed nations also due to the financial crisis there are deprived and marginalised people, affected most by the downturn. Why is it so? Despite TAI of US only the second best in the world after Scandinavia .

Why is US thinking the need for a high speed rail network now after China became the toast of the world It heralds transparency, less tinkering in delivery of goods and service to people.

As nations states develop the gaps & fissures within surface and it is necessary to readjust and restructure accordingly of changing pattern of need

US is one of the early adopters of ICT from their military

usage & then thrown open to public and the TAI has been

always on the highest amongst nations.

ICT can act as great spur in the revolutionary fervour.

SMS & Tweets have galvanised the pink revolution

sweeping across North Africa and the Arab World.

Hafiz Pasha described the increasing use of ICT by

governments in the Asia Pacific, as the fastest growing

region in the world for the last decade or even before as

planned process, He described it thus: .

Information and Communication Technologies (ICTs) are now widely

accepted by developing countries as a critical tool in their efforts to eradicate poverty, enhance human development, and achieve Millennium Development Goals (MDGs). Recognizing this untapped potential, infrastructure initiatives and development strategies incorporating ICT are being increasingly promoted and launched across the Asia-Pacific.” Hafiz Pasha UN Assistant Secretary-General, UNDP Assistant Administrator, Director, Regional Bureau for Asia and the Pacific

Future references will further emphasise the correlation of ICT & development of the countries & the relative inclusivity of such growth.” . A study claims that ICT diffusion accounts for up to 90 percent of the increase in the Human Development Index (HDI) observed in some nations. It is clear that ICTs have an important role to play in fighting poverty and in achieving the MDGs”

The information economy for the benefit of all, requires vision,

discipline, planning, and method. The vision sets the stage and the agenda is defined by a strategic plan, followed by an action plan.

There are three aspects that need to be considered from a strategic

planning standpoint. The first is the importance of maintaining a human

development perspective and focusing on the achievement of benefits for people through the appropriate use of ICTs.

The second step is defining the process, agreeing on the steps involved, and managing this process.

The third aspect is the impact of changes in the international economy, especially the telecommunications sector, on the diffusion of technology and of ICTs, in particular.

Issues related to human development are complex and interlinked, a strategic planning is needed for the following reasons:

To instil rigour in the ICT planning process;

(What are we trying to do? What is the ICT strategy for and why? And

who is it for?

What is the ultimate vision or goal? What are the objectives to achieve the goal? How do these help countries meet MDGs?

To help identify and consider the main stakeholders and

their concerns;

To help identify and understand pertinent issues;

To help compare and contrast practices (especially best

practices);

Back drop to financial inclusion as conditioned to ICT

intervention.

The relative costs comparison can be a little way word in

other illustration. But we take it on its face value to arrive at

a price discovery model vis vis efficacy & ease of delivery. It

is to be noted that all channels are ICT based & not normal

branch banking except in the first picture.

• Right now world over Financial Inclusion is the buzzword.

• Mobile inclusion has been phenomenal but almost 41% of the remain unbanked.

• So UN,G20, world bank, GSMA and most development organisations are working together to make FI a success story

• In India there is now a formal committee headed by Dr K C Chakraborty , Dy Governor RBI to speed up Financial Inclusion.

• Already Aadhaar enabled payment is underway and has been launched on 20th October formally by Hon PM Dr Manmohan Singh in Rajasthan

• UID the biggest citizen Identity management scheme is targeting to get at least 50 Cr Indians enrolled by 2014

• Soon there will be more ICT enabled bank branches, more ATMs, and more POS and cash dispensing machines for the unbanked

• Plus mobile based FI

• Nothing would have been possible but for the Gigantic efforts put by all of us and the Government.

• And MS Swaminathan & MSSRF has contributed & done its bit in paving the way forward