Govt, pvt sector must collaborate to bring women and migrants in formal banking

The global study on financial and digital inclusion appreciates the DBT and JAM initiatives by the Indian government

GN Bureau | December 16, 2016


#Brookings   #financial inclusion   #banking   #DBT   #JAM   #India  

Ashish Asthana

India ranks in the middle of a group of 26 emerging economies regarding access to formal financial services, according to a global study. The Brookings Financial and Digital Inclusion Project (FDIP) 2016 report has given India – with 860 million adult population – an overall score of 71 percent. In ‘country commitment’ India scores 100 percent, 72 percent in ‘mobile capacity’ and 94 percent in ‘regulatory environment’ and 44 percent in ‘adoption’.

Kenya tops the list, scoring 84 percent – five percentage points higher than Colombia which scores second, with 79 percent. The first annual FDIP report was published in 2015, where it studied the state of financial inclusion across 21 countries. The findings of 2016 report, which added Dominican Republic, Egypt, El Salvador, Haiti, and Vietnam in its sample, show continuing progress across the global financial inclusion landscape. 

“This assessment is driven in part by the recent launch of comprehensive financial inclusion strategies in several countries and, more broadly, by substantial progress in enhancing the digital financial services ecosystem,” the report said.

Last year India scored 72 percent. Kenya topped the list in 2015 too. The biggest improvement, however, in scores between the two years was made by Philippines, which increased its overall score by eight percentage points. The increase was driven in part by the launch of its national financial inclusion strategy, as well as its strong performance in terms of mobile capacity.

Uganda was the lowest income economy among the countries ranked at the top of the FDIP scorecard.  “Uganda’s high score was driven in part by its strong levels of mobile money adoption (the second-highest among the FDIP countries as of 2014) and the amendment of the 2004 Financial Institutions Act,” the report says. Among other provisions, the amendment provides a legal basis for the regulation of agent banking and empowers the central bank to establish more than one credit reference bureau, the report adds.
 
The report appreciates the DBT and JAM initiatives by the Indian government.  “Digital mechanisms are key components of India’s financial inclusion drive,” the report says. For example, the report states, the PMJDY program seeks to channel all government benefits to beneficiaries’ accounts and promote its Direct Benefits Transfer (DBT) scheme.  “The program explicitly notes a desire to reach out to youth and to leverage nontraditional mechanisms, such as mobile devices and telecommunications companies’ cash-out-points. In this vein, the Jan Dhan Yojana, Aadhaar and Mobile numbers initiative (also known as the “JAM trinity”) was developed to combine biometric identification initiatives with mobile access to financial services in order to directly transfer subsidies to beneficiaries and consequently advance efficiency and reduce leakages,” the report adds.

The report highlights a few challenges cum opportunities in furthering financial inclusion in India. A key challenge is the lack of awareness of the formal banking and financial services among customers. “The government and private sector stakeholders must work together to address barriers to financial inclusion among women, 67 migrants, and other underserved populations,” the report says. Ensuring that risk-based KYC requirements are implemented effectively is one necessary step to reducing barriers surrounding financial access and usage, the report notes.

“Additionally, accelerating interoperability of electronic wallets could advance usage of these services by promoting convenience for customers,” the report concludes.

 

Comments

 

Other News

ONGC office wins sustainable building design award

 The state-of-the-art corporate office of oil and natural gas corporation (ONGC), Pandit Deen Dayal Uphadhayay Urja Bhawan,  in New Delhi has won leadership in energy and environmental design (LEED) India ‘platinum’ award by US green building council (USGBC), the highest recognition f

Mumbaiís changing campaign colours

Demonetisation was a factor as candidates in the fray for the Mumbai civic polls wooed people. Though the election commission doubled the expenditure limits from Rs 5 lakh to Rs 10 lakh, some candidates found the going hard as there was a weekly withdrawal limit of Rs 24,000. Rs 10 lakh is way ab

Make Godseís statement public, but donít idolise him

Nathuram Godse, who was brought up by his parents as a girl in the first few years of his life, has been reviled for decades for fatally shooting the apostle of peace Mahatma Gandhi. What Godse said during the Gandhi assassination trial has not been made public, giving rise to considerable speculation.

First coal rake flagged off from NTPCís coal block in Hazaribagh

The first coal rake of NTPC’s Pakri-Barwadih coal mine at Hazaribagh was flagged-off by finance minister Arun Jaitley, Jharkhand chief minister Raghubar Das, union minister of state for power, coal, N&RE and mines Piyush Goyal, and minister of state for civil aviation Jayant Sinha, at Ranchi on

AIMIM to contest Pune civic polls for the first time

“Our corporator is missing,” reads a banner on a defunct lamppost in Shaniwar Peth – a densely populated area in Pune, the second largest city of Maharashtra after Mumbai. Many more sprang up in the nearby alleys, a couple of months before the municipal corporation polls on February 21.&n

How a PSU takes land for mining

On October 1 last year, Mehtab Alam Ansari, 30, who worked as a tailor in Delhi, had arrived in his village, Chepa Khurd in Barkagaon tehsil of Harazibagh district, to celebrate Eid with his family. That morning, he was nearing Dadi Kalan, a neighbouring village, to meet an acquaintance when he heard gunsh

Video

रामदेव को अब 2000 का नोट पसंद नहीं
Digital Transformation Summit

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter