Indicus Centre for Financial Inclusion


Financial Inclusion- News and Views - May 2015


May 2015


This month's newsletter brings highlights from the recently released Global Findex Database 2014; the report shows a huge drop in the number of unbanked over the past three years, with mobile money accounts making a significant difference in Sub-Saharan Africa. India shows some improvement in financial inclusion metrics since the last report in 2011; though the phenomenal success of the Pradhan Mantri Jan Dhan Yojana in opening accounts has not been captured in this database, a lot more needs to be done to increase account activity.

Account penetration in India has increased from 35.2% in 2011 to 52.8% in 2014 and debit cards penetration has also risen from 8.4% to 22.1%.

Only 10.4% of the people reported using their debit cards for payments in 2014, while the share of people using ATMs as the main mode of cash withdrawal rose from 18.4% in 2011 to 33.1% in 2014.

The percentage of Indian adults who have saved at a financial institution has gone up from 11.6% in 2011 to 14.4% in 2014.

However, the percentage who reported taking credit from a financial institution has fallen from 7.7% in 2011 to 6.4% in 2014.

Kabir Kumar of CGAP has summarized India's position in a blog post, "From More Accounts to More Accounts Activity in India", noting that many of the positive efforts taken by policy makers in the past few months are likely to show a better picture for India in both accounts and account use in the next Findex report.

Despite growth in penetration, India has both the lowest account penetration and lowest use of account for payments among all BRIC countries. Just 15% of adults report using an account to make or receive payments, compared to about 40% for Brazil and China and over 50% for Russia and South Africa

India has one of the highest dormancy rates at 43%, accounting for about 195 million of the 460 million adults with a dormant account in the world. This contributes to a high dormancy rate in South Asia as a whole which has double the average dormancy rate across all other development regions and eight times the dormancy rates in high-income OECD economies.

He concludes that for effective financial inclusion, the government and banks must go all out in ensuring that the newly opened accounts are used now.

Leora Klapper, lead economist at the World Bank and an author of the Findex report, highlights the fact that access to accounts contributes significantly to empowerment. The New Yorker reports her experiences, emphasising the powerful impact of access to savings accounts on women. Women in India would relate to the stories from Bangladesh and Ghana where bank accounts and digital payments have given women control over their own money. As Klapper notes, it is important to understand the existing barriers and design appropriate products e.g. local retail outlets like mobile phone agents can offer financial services at low fees at the doorstep, meeting the needs of poor women.


Section I: Policy – the latest from India's policymakers

Differentiated Banks: Design Challenges

Shri R. Gandhi, Deputy Governor, RBI, April 18, 2015

Musings of a Departing Forex Market Regulator

Shri. G Padmanabhan, Executive Director, RBI, April 3, 2015

RBI celebrates its 80th Anniversary

Dr. Raghuram G. Rajan, Governor, RBI, April 2, 2015


Snapshot of PMJDY progress

PMJDY bank-wise progress as of 31st March 2015

Jan Suraksha Schemes

Priority Sector Lending-Targets and Classification

Section II: News and Views Digest – the latest from India and abroad


A bank account for all

Financial inclusion: TRAI chief Khullar bats for telcos

The inclusion project

Financial Inclusion: How Banking Is Coming to India's Countryside

Digital financial inclusion in India – taking off in 2015

India Plan Means Extra Costs for Banks

Jan Dhan – easier said than done

On the ground, Prime Minister's Jan Dhan scheme is still a painful affair for bank staff

India's Push for Banks for All Leaves Some Still Outside

How you can help domestic workers achieve financial inclusion

India accounts about a fifth of the global population without bank accounts

Aadhaar world's largest biometric ID system

In 5-10 years, all shopping will be via mobiles: Daniel Schulman

Differentiated banking is key to financial inclusion, says RBI's Gandhi


The 'Ripple' Effect: Why an Open Payments Infrastructure Matters

Microinsurance: Disrupt, Fail, Repeat?

Unlocking Access to Critical Services Through Digital Payments

Empower the Customer to Choose and Use Financial Services

EasyPaisa: Incentivizing Mobile Wallet Usage in Pakistan

Digital Credit: Consumer Protection for M-Shwari and M-Pawa Users

The Complex Smallholder-Arthi Relationship in Pakistan

Global Findex: Income Gap Persists Amid Rising Account Ownership

Picking Winners in the Great Remittance Disruption

The Second Coming of M-Shwari: Beyond Early Adopters

Geography Matters When Talking about Smallholders

Why M-Shwari Works

Smallholder Households: A Financial Inclusion Imperative

Section III: Research – surveys and studies on expanding access to financial services

Enabling Customer Empowerment: Choice, Use, and Voice

Antonique Koning and Monique Cohen, CGAP, April 28, 2015

Early Insights from Financial Diaries of Smallholder Households

Jamie Anderson and Wajiha Ahmed, CGAP, April 3, 2015

How M-Shwari Works: The Story So Far

Tamara Cook and Claudia McKay, CGAP, April 2, 2015



Digital Financial Inclusion: Agenda for India

Policy Brief January 2015

Global Lessons on Partnerships for Financial Inclusion

Policy Brief January 2015

Implementing the Pradhan Mantri Jan-Dhan Yojna

Policy Brief November, 2014

In the media

S V Divvaakar: Pay for financial inclusion

Business Standard, 29 April 2015

Probir Roy & Sumita Kale:Is big always best?

Business Standard, 19 February 2015

Do we need banks for financial inclusion?, 17 October 2014


Payments Banks and Partnerships

A short note on Bharat Bill Payment System: Guest Post by Probir Roy

Two Challenges To Help Two Billion Reach Financial Security: Co-authors: Kosta Peric, Jake Kendall

PMJDY: Three questions

PMJDY: Assessing the quality of agents

PMJDY surpasses target before deadline


Editor: Sumita Kale can be contacted at

The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation.

© Indicus Centre for Financial Inclusion. All rights reserved. 30thApril 2015