i nc lu s i ve f i nanc e i nd i a re port 2014
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In terms of gender till last year the trend was 90 per cent of the clients in MF but now the trend is going down
between 86 per cent and 83 per cent.
(Vijayalakshmi Das, Smita Premchander and Madhu)
Financial Literacy
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Financial literacy/capability is an important component of financial inclusion but funding the financial literacy
initiatives is still a challenge. There is no established funding mechanism to bear the cost. Options like PPP or
Viability Gap Funding should be explored and taken to the government as most appropriate strategy for promotion
and sustainability of financial literacy initiatives.
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A lot of money is being spent by ICICI foundation and Citi Bank for financial counselling. The impact of these
financial counselling needs to be studied as a lot of money has been spent and we need to analyse the actual
investment as each counselling centre costs around 50–60 lakhs to set up.
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The GIZ initiative on financial capability looks beyond financial inclusion and is based on the assumptions that if
FI is there, people have money and access to bank accounts then what? FI will actually be meaningful if people use
the money and account productively.
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Based on the findings of a study, GIZ defined financial capability as an ensemble of abilities that relates to making
of informed financial choices, managing money effectively and using financial services for one’s own benefit.
(Amit Arora, Vijayalakshmi Das, Smita Premchander)
Micro Insurance
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On insurance and pension, the role of private sector should also be considered in the report. Social security and the
role of private sector should be an important area which could be included in the report. Examples from RSBY can
be taken which has seen huge success in efficiency and management.
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Janashree and Aaam Aadmi Bima Yojana can be managed with the help of private sector rather than the government
sector to increase accountability and efficiency.
(AnoopKaul, Pallavi Sen and Tara Nair)
Business Correspondent Model
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The players in the BC space have formed an industry association (BCNM) which is now legally established as BCFI,
we can ask BCNM to share industry views, issues and challenges being faced by the entire industry.
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There are lots of MFIs that have gone into BC Model but don’t see an impact on the interest being changed after
successful growth of BC. Unless the cost of funds for the poor is lowered they will not come forward and access all
the services.
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The client protection and certification initiatives also need to be documented. What does client protection means
under new models like BC or savings needs to be discussed in the report. Policy impediments should be discussed
in the report as some of the financial institutions shy away from being a BC.
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BASIX has helped some SHGs to function as BCs in Delhi. BASIX Local Area Bank started BC operation and
focused on credit apart from deposits and as a result the Bank became viable in seven months and BC became
sustainable in 13 months. This can be taken up in the report. FI cannot be a standalone model but developed as
inclusive growth model.
(Amit Arora, Vijayalakshmi Das, Pallavi Sen, Anoop Kaul)
