Financial Inclusion Promotion and Development Fund (FIPF) and the Financial Inclusion Inclusion Technology Fund (FITF)

The Hon’ble Union Minister of Finance, in the Union Budget Speech for 2007-08, announced the constitution of the Financial Inclusion Fund (FIPF) and the Financial Inclusion Technology Fund (FITF), with an initial corpus of Rs. 500 crore each.

The FIPF shall support “developmental and promotional activities” with a view to securing greater financial inclusion, particularly among weaker sections, low income groups and in backward regions/ hitherto unbanked areas, so as to enable these segments of the population to increase their incomes, acquire capital, invest their savings, manage their risks and ultimately work their way out of poverty, within a reasonable time frame.

The FITF shall be utilized to enhance investment in ICT aimed at promoting financial inclusion, stimulate transfer of research and technology in financial inclusion, increase technological absorption capacity of financial service providers/users and encourage an environment of innovation and cooperation among stakeholders.

The Funds shall consist of an initial corpus of Rs. 500 crore each, to be contributed by the GoI, RBI and NABARD in a ratio of 40:40:20.

The activities to be supported by FIPF shall involve capacity building, improving credit absorption capacity, reduction of transaction costs, simplification of procedures, development of innovative products/ processes, supporting measures for awareness creation/ publicity for improving financial literacy/ education, undertaking counselling activities, R & D proposals, suitable pilot projects & viability gap funding proposals, etc.