Connectivity remains a challenge for Digital Financial Inclusion

Posted on September 26, 2016 by Sumita Kale

With the new entrant Reliance Gio rolling out a pan-India high-speed network, with a slew of pricing offers, there has been a churn in the telecom industry in India. From the point of view of financial inclusion, the entry of Reliance Jio will change the game only if it penetrates with good service quality in rural and remote areas. So far, the market has been in turmoil, with significant interconnection challenges brought to the forefront (See Reliance Jio, Bharti Airtel in interconnect points spat. Livemint-18-Sep-2016; Reliance Jio, Airtel Trade Charges Over Interconnection Issue, NDTV-18-Sep-2016,Call failures due to points of interconnect unacceptable: TRAI,, 26-Sep-2016).  

As noted in an article in the Mint ("Why cheap data wont be enough, 20th September 2016) authored by Sumita Kale and SV Divvaakar of ICFI, "Connectivity is a serious operational challenge reported by agents in the MicroSave nationwide survey of PMJDY agents (October 2015). Agents tend to focus their business at locations that have better connectivity, and around a third use their mobile phone as a “makeshift arrangement” to connect to the Internet for transactions. On the demand side, according to a national survey by the Consultative Group to Assist the Poor last year, the first concern reported by low-income customers in adopting digital financial services was the inability to transact i.e. downtime. As the MicroSave work notes, one failed transaction is often enough to turn away the entire village from digital transactions."

The ICFI piece calls once again for the RBI and TRAI to work together to build a geographic information system heat map of telecom towers, data service quality profiles and transaction quality at the locations of “Bank Mitras” (business correspondents or BCs) and rural branches across India. 


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