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TOPIC: Banking the Unbanked

Banking the Unbanked 5 years, 10 months ago #162

  • Sourabh
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How to go about financial inclusion ie..including Rural india into Banking?

over 6 lakhs villages in India....approximately 50,000 have access to finance.(5.5 lakhs still untapped)

About 145 millions(highest) households execluded from Banking

only 10% of the population has any kind of life insurance and 9.6 % has non-life insurance coverage ...

the above stats shows a great potential in indian ...esp rural market.....how to go about it???
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Re: Banking the Unbanked 5 years, 10 months ago #165

Financial inclusion in rural areas could be achieved through Micro Finance institutions. Agreed that majority of the population will still not be served through this medium but then it would be a good start. Is there any other way to actually take it to the masses ?
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Re: Banking the Unbanked 5 years, 10 months ago #169

  • Sourabh
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We have NABARD....working at Rural level......is it now providing Micro Finance...?

I guess here....its not just abt opening of Institutions..its also abt educating the masses....as how banking is beneficial to them..

Most of the people in big cities......use online transactions...why can we shift higher proprotion of banking infrastructure to rural areas by making people in cities to use telphonic/online services for banking.....
For that we really have to develop trust in these modern sytems....

Please note that majority of idian popualtion is of the average age of 25 yrs..and young people like us don't mind using online services...

Re: Banking the Unbanked 5 years, 10 months ago #174

I think majority of the younger population is now using online facilities provided by the banks. We have private sector banks which are aggressively promoting it and a few of them also charge you for visiting the branches. So i think over the next few years, most of the people in urban areas are going to use online facilities.

But the rural areas is the real test. It is not feasible for the banks to open up branches in every village as it would not justify the costs. The best way is to adopt some kind of parabanking services which is being used in UP by Sahara group. Agreed it will be very problematic as there will be corruption involved. However with technology it should be possible for established banks to reach out to the rural areas without setting up branches. So the microfin institutions and banks should work in tandem to achieve it.

Re: Banking the Unbanked 5 years, 10 months ago #175

  • mansin
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Will the UID project come in handy ?

Re: Banking the Unbanked 5 years, 10 months ago #176

Could come in handy but we are still pretty far off from actual implementation. I saw on a news channel a few days back that a few people were actually selling fake uids in karnataka. This would defeat the purpose. But UID is actually a fantastic project and if successful then it would be great for India

Re: Banking the Unbanked 5 years, 10 months ago #178

  • mansin
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@Sourabh : how would you promote online services in rural market ? I think there is a lot of infrastructure issues in there

@sunny : How can the UID be linked to microfinance ? any idea ?

Re: Banking the Unbanked 5 years, 10 months ago #179

  • poojad
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I think profits will be the main criteria for private banks to enter the hinterland. Government should take the step establish rural branches.

Government can offer some tax exemptions and Sops to the private to encourage private players in rural space.

Re: Banking the Unbanked 5 years, 10 months ago #182

  • Sourabh
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@mansin: The idea of online services in rural area will not work....I talked abt making the urban people more inclined towards online transactions as one of the reason why US is developed is because money changes hand very fast there because of credit cards...online transactions etc..which contributes to economy.......so why not..in india..

for rural people ...trust is an important factor....which make them to see in person the caretaker of their money....so why not open branches in rural more as compared to urban places.....I know infrastucture investments for facilities and people will be required...but seeing the size of oppurtunity it will be a favorable decision....
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Re: Banking the Unbanked 5 years, 10 months ago #184

  • Sourabh
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@mansin : UID can facilitate the reach to rural people via software services....which will help in better management of accounts of large number of people....because of its unique ID which can be used to maintain the records..........Now this can be useful for operations of the bank offering services but not rural people as they don't have the basic skill of using such services on their own....so it stills moot a question of putting a interface of banking institutions between rural India and their potential in facilitating the economy.......which is a challenging job....
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