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  


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

The Boy Who Became the Mahatma

This year, as the nation commemorates the 75th death anniversary of Mahatma Gandhi on January 30, Rajesh Talwar, a prolific author who is also a legal advisor to the UN, is all set to release a play for children on non-violence chronicling the life of Mahatma Gandhi, ‘The Boy Who Became the Mahat

What makes Sundargarh the cradle of hockey in India

Neha Lakra, 20, doesn’t forget to practise hockey, at least for four hours, every day. Whether at home or at the Panposh sports hostel in Rourkela where she is training under the guidance of coaches, her routine doesn’t change. “I can’t sleep unless I have worked on the ground,&rdqu

Where the true sadhana of Vedanta is to be found

Somewhere Among the Stars: Reflections of a Mystic By Adi Varuni Kali/BluOne Ink, 282 pages, Rs 395 Decades ago, when an unknown N

India celebrates National Voters’ Day

The 13th National Voters’ Day was celebrated across the country Wednesday with president Droupadi Murmu gracing the national event held here. Kiren Rijiju, union minister for law & justice, was the guest of honour. The chief election commissioner, Rajiv Kumar, election commissioners Anup Chandra

INS Vagir to give fillip to Navy: Admiral Hari Kumar

The Indian Navy commissioned its fifth stealth Scorpene class Submarine INS Vagir on Monday at the Naval Dockyard, Mumbai in the presence of Admiral R Hari Kumar, Chief of the Naval Staff. Vagir was launched on November 12, 2020, under Project 75 (P75) and post completion of sea trials it w

Uddhav joins hands with Prakash Ambedkar ahead of BMC polls

Ahead of the Mumbai civic polls, former Maharashtra chief minister Uddhav Thackeray on Monday announced an alliance with Prakash Ambedkar`s Vanchit Bahujan Aghadi (VBA). Addressing a joint press conference, Thackeray said their grandfathers, Keshav Thackeray and Dr. B.R. Ambedkar, were conte

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter