Use of Technology in Financial Inclusion 6th Group

8/3/2019 Use of Technology in Financial Inclusion 6th Group

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Financial Inclusion -Definition

Delivery of financial services at an

affordable cost to vast sections of

disadvantaged and low incomegroups


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Who are excluded ?

Marginal Farmers

Landless Farmers

Oral Lessees Self Employed

Urban slum developers

Migrants

Minorities

Social excluded groups

Senior citizens

Women


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Financial Services includes

Savings

Credit

Insurance

Remittance facilities etc.


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Financial Needs

access to safe, easy and affordable credit and other

financial services

for

economic growth, reducing income disparities and

reducing poverty


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5A few statistics

51.40%: Farmer households financially excluded.

73%: Farmer households having no access to

formal sources of credit.

64%:Share of Central, Eastern and North Eastern

regionsin the total financially excluded farmer

households in the country.

Source: NSSOSurvey 59th Round


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6TARGET

By 2012:Cover at least 50% (55.77 million) of the

excluded.

By 2015:Includethe remaining.

250 new households per branch per annumto be

covered by all semi-urban and rural branches of

banks and RRBs.

Source: Reportof the Committee on Financial

Inclusion in India (Chairman: DrC. Rangarajan);

January 2008


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4Benefits of GreaterFI

For the common manescape from the clutches of money

lenders; sending / receiving remittances; no need to hold

savings in cash etc.

For th

e banksach

ieving access to a large untapped poolof customers.

For the Govt.-ensuring flow of aid / grants to the targeted

beneficiary.

For the RBI -spread of banking culture and extension of

the reach of formal financial system.


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Financial Inclusion - Challenges

Regulatory aspects

3 AML, KYC, etc. norms to have inclusive parameters for rural banking

Under utilisation of physical & banking infrastructure

3 High delivery costs, legacy systems, inflexible procedures

Information asymmetry

3No credit history for rural customers, willful defaulting, unclear

Government policies


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Technology Solutions

Smart Card, hand held terminal, central

CPU

Automated Teller Machine (ATM)

Point of sale

Mobile Phone Short Message Service (SMS)

Public Call Office (PCO) connectivity


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Enabling Environment for Financial Inclusion

ENABLING INFRASTRUCTURE

FinancialInclusion

BusinessCorrespondentsBanks


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Leveraging Technology

Common Platform Sharing Resources

Financial Inclusion initiative by IDRBT

Multi-application smart card system

Store of electronic cash, data repository for essential information relating to the

card holder

Biometric identification, doubling up as an entitlement identifier/social security

card

For government payments like pension, subsidies, utility payments healthcare,

crop insurance, life insurance


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Role ofTechnology

Key Challenges

Dispersed client based with poor access

Limited electricity supply and access

Limited telecom/ broadband connectivity

ATMs may not be viable and maintainable inerratic power situations

Cash collection points customers like to

deposit at a fixed location

Banking service delivery of information ,statements, etc

Access to account in nearby cities, townsvillages

Financial education & awareness

Developing trust in rural India for financialsystems

Mitigation through technology

Mobile branches covering select geographies

Self generated power - diesel, solar, battery

UID as common identification mechanism

Online/Offline and Pseudo online datacapture and updation systems. LeverageMobile networks

Cash deposit & dispensing partners e.g. postoffices which can deliver cash like moneyorders

Developing rural-banking infrastructure

Information dissemination through partners,Internet kiosk enabled , toll free call centrein local language

ATM cards for such customers


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Triggers for Financial Inclusion

IT as enabler Trigger 1:Growing affluence leading to ACCEPTABILITY

Trigger 2:Building the rural-banking INFRASTRUCTURE

Trigger 3:INNOVATION IN TECHNOLOGY leading to enhanced

penetration, user-friendly approach and security

Trigger 4:Convergence of communication systems are ensuring

scalability of delivery channels leading to greater ACCESSIBILITY

Financial Inclusion initiative by IDRBT

Multi-application smart card system

Store of electronic cash, data repository for essential

information relating to the card holder


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Achieving Synergies - Integration

Technology Providers Service Providers

Chip Manufacturers

Card Manufacturers

Device

Manufacturers

Software companies

Application

Developers

Systems Integrators

Banking Channels Smart Phone

ATM

Point of SaleTermnial

Personal Computer

Telephone

Mobile phone

Set-top Boxes

Kiosks


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Supportive Financial Services


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ProgrammedMobile as a Hand Held Device

ProgrammedMobile as a Hand Held Device


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Simputers/PDAs/Laptops/PCs can be effectively used


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COMPOSITE HAND HELD DEVICE


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Deployment channel -1Card Many Applications

The smart cards can be used for various purpose like Financial inclusion, Merchant

Establishments, Government initiatives like Pension, NREGS disbursement, ATMs, ShoppingMalls etc.

ATMs Financial Inclusion

Merchant Establishments

NREGP Disbursement

Pension Disbursement

Shopping Malls


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Pros and Cons of some Technologies- Source RBI


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Pros and Cons of some Technologies- Source RBI


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Thank you

Use of Technology in Financial Inclusion 6th Group

Documents

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