Indicus Centre for Financial Inclusion


Telecom Metrics for Financial Inclusion

In a recent article in Financial Express (November 4th, 2015), S V Divvaakar of ICFI has highlighted the need for appropriate telecom metrics for financial inclusion. Noting that the traditional metric of tele-density means little for financial inclusion, he recommends that the telecom footprint be monitored more granularly to check availability and quality of internet and broadband services at the locations of ‘Bank Mitras’ (business correspondents or BC) across India. “The absence of mandatory requirement to report data at the district, block or sub-service area levels denies appropriate analysis of our readiness towards financial inclusion. Such granular assessments call for tower footprints and bandwidth availability to be mapped to the locations of BC outlets.”

The details have been fleshed out in the Indicus Policy Brief for November, available at this link

The takeaways from the brief are five aspects that the PMJDY Mission should consider toward strengthening the financial inclusion architecture:

  1. Put in place a unified, harmonised database of the financial inclusion footprint, in terms of outlets, service points, devices, connectivity and agent networks, aggregated and monitored by a single source.
  2. Recognise that internet and broadband footprint and quality of service need to be monitored directly under the PMJDY.  In consultation with the Telecom Regulatory Authority of India (TRAI), National Payments Corporation of India (NPCI), Unique Identification Authority of India (UIDAI), and others, the Department of Financial Services (DFS) should notify the minimum telecom service requirements for devices for conducting mobile financial transactions.
  3. Include in its monitoring framework these relevant metrics: coverage maps showing the present status of internet/broadband penetration, quality of telecom coverage – represented by uptime, transaction times and transaction failure data, for each enlisted Sub Service Area (SSA).  This will enable a conjoint mapping of device penetration across Bank Mitra (Business correspondents or BC) outlets and requisite telecom connectivity to enable successful financial transactions.
  4. Identify, along with TRAI, appropriate metrics for service quality appropriate for mobile financial transactions, like ‘transaction drops’ (equivalent to ‘call drops’ in voice telephony nomenclature). Data on service quality can be requisitioned under a financial inclusion section included in the quarterly review reports of telecom service penetration and quality.
  5. Ensure through TRAI a more granular reporting by service providers of telecom footprint and data service quality aligned to Sub Service Area (SSA) level, and regularly update the availability and level of telecom connectivity (2G, 3G) at a granular (sub-service area) level, ideally building a GIS heat map of telecom towers, data service quality profiles and transaction quality at the locations of ‘Bank Mitras’ (business correspondents or BC) across India. 
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