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Financial Inclusion- News and Views - August 2015

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August 2015

 

As Digital India takes shape across the country, the impact the mission will have on financial inclusion will depend on how low income customers adopt the new transaction modes. Last month, Akodara, a small village in Gujarat, was in the news for becoming India’s first village to go truly digital. A recent article in the Hindu (Samrat Chakrabarti, July 14, 2015) details the new cash-less payments mode that has set in at the small kirana shop, integration of mandi payments within the digital fold etc. An initiative of ICICI Bank in partnership with the Government of Gujarat, this village of 200 households has, over the past six months, been transformed into a model digital village. While the initiative has translated the vision of digital financial inclusion on the ground, there are many challenges to overcome if this model is to be extended across India. Apart from the basic infrastructure for the digital network, financial literacy and consumer awareness need to be taken up on a war footing.

For the mission to succeed, as the government and industry work towards setting up the enabling infrastructure, financial service providers should move away from treating the digital platform as just another channel. Financial literacy should move away from merely educating the poor and unbanked on using existing products and services. Rather, as Ignacio Mas points out in a a blog post for CGAP, “digital services are able to replicate what people already do informally, in everyday life, much more closely than standard bank products delivered over brick-and-mortar channels can ever achieve.” The key to change lies in first understanding the current behaviour and financial lives of the poor, and then using new digital tools to replicate these existing behaviours through the new medium. In the paper Money Resolutions, A Sketchbook, Ignacio Mas characterizes the common financial decision-making practices of poor people; with precarious, unpredictable incomes, they cannot afford to live by hard-and-fast rules set by formal financial services. Fortunately, the digital financial service environment allows for a unique engagement that empowers customers and in his paper, Money Resolutions, Digital Simulations, Mas shows how the new tools can be used to (i) engage with customers in two-way communication more frequently and possibly more meaningfully; (ii) offer higher levels of service targeting and personalization and faster product development; and (iii) convey a greater sense of service availability and convenience. It is only once people are comfortable using the new tools for their old ways that service providers should move to using the new tools to introduce new products and services. The process will definitely be slow, but must be managed such that the poor and unbanked are gently nudged over time into greater usage of regular financial products and services digitally.

Research

Direct Benefits Transfers: An Update
Policy Brief June, 2015

Digital Financial Inclusion: Agenda for India
Policy Brief March, 2015

Global Lessons on Partnerships for Financial Inclusion
Policy Brief January 2015

In the Media

The last mile in direct benefits transfer
Mint, 01 June 2015

Achieving financial inclusion a key matrix
Financial Express, 29 May 2015

S V Divvaakar: Pay for financial inclusion
Business Standard, 29 April 2015

Blogs

Tracking progress in financial inclusion
Direct Benefits Transfers - A short update
Including women- Lessons from Somaliland
Payments Banks and Partnerships

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

IT Governance and IT Strategy: Board’s Eye view
Shri. Harun R. Khan, Deputy Governor, Reserve Bank of India, July 28, 2015

Unintended consequences of new international supervisory framework: An Emerging Market Perspective
Shri S.S. Mundra Deputy Governor, Reserve Bank of India, July 20, 2015

Notifications:
Trend of Zero balance accounts under PMJDY 
Pradhan Mantri Jan - Dhan Yojana Accounts Opened 
Finance Minister Shri Arun Jaitley said that the Government has laid down a long term four year plan for Bank capitalization
Saturation of Aadhaar seeding in DBT district
Nomination/Allocation of Nodal Officers for State Level Bankers' Committee (SLBCs) Meetings
ATM Progress for the quarter ending June, 2015
Master Circular - National Rural Livelihoods Mission (NRLM)
Master Circular - National Urban Livelihoods Mission (NULM)
Extending Value Added Services through ATMs by Primary (Urban) Co-operative Banks (UCBs)
Priority Sector Lending – Targets and Classification

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

India

RBI panel to push financial inclusion
Tamil Nadu and Kerala lead surge in financial inclusion
Payments bank licence imminent for India Post
Most payments banks set to be joint ventures of existing lenders
Telcos should operate payments banks: Sunil Mittal
Micro-payments cos offer Aadhaar-backed e-KYC
Payments bank licence: Mor panel sets the ball rolling, submits its report to RBI
Government will propose fixed deposit scheme during Rakshabandhan to deepen financial inclusion
How to do your bit for financial inclusion
Govt to provide more funds to social security schemes: FM Arun Jaitley
Taking stock
Lessons on Leadership: Check Your Assumptions
Lessons on Leadership: Customer-Centric Measures Matter
Nabard aims for financial literacy in Odisha
Reluctant PSBs
Canara Bank ups ATM installation target to 1000 this fiscal
Bandhan Bank to foray into southern India
Using cloud, mobility, analytics to make Digital India
IDFC Bank to start operations from Oct 1
New senior health plan with Rs 1 lakh cover on the cards

 

International

Mobile Merchant Payments: The Next Battleground?
Lessons on Leadership: Turning Banking Upside Down
Smartphone-Led Digital Finance: Three Areas to Watch
New Tools to Accommodate Old Financial Habits: Key for DFS Usage
Ghana: DFS Taking Off Amid New Regulations and Market Momentum
Consumer Risks and Rewards Amid Increased Competition in Kenya
Mobile Money in Bangladesh: Still a Long Way to Go
Should Your Friend Be Your Banker? Digital Models Test the Waters
Lessons Learned from Digital Microinsurance ‘Sprinters’
Cutting the Cost of Remittances
DaviPlata: Taking Mobile G2P Payments to Scale in Colombia

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

Mobile Insurance Trends: The Curious Case of India
Premasis Mukherjee, MicroSave, July 01, 2015
Understanding Household Resilience of the Poor in Burkina Faso
Megan Gash and Bobbi Gray, CGAP, July 2, 2015
Going Mobile with Conditional Cash Transfers
CGAP, June 2015

The monthly newsletter from the Indicus Centre for Financial Inclusion documents the latest news and views in the financial inclusion space, to provide a knowledge base that will help build understanding around how to accelerate the poor’s access to high-quality financial services. Editor: Sumita Kale can be contacted at sumita@indicus.net. 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. http://www.indicus.net/icfi

© Indicus Centre for Financial Inclusion. All rights reserved. 31st July 2015

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