Financial Inclusion- News and Views - April 2015


April 2015


This month's newsletter focuses on digital financial inclusion, leading with a recent CGAP Policy Brief by Kate Lauer and Timothy Lyman, "Digital Financial Inclusion: Implications for Customers, Regulators, Supervisors, and Standard-Setting Bodies." The brief sets out a concise definition of digital financial inclusion as "digital access to and use of formal financial services by excluded and underserved populations" and aims at giving policy makers a clear picture of the rapid development of digital financial services for the poor. Providers of digital financial services fall into four broad categories: a) a full-service bank offering a basic transactional account for payments, transfers, and value storage via mobile device or card plus point-of-sale (POS) terminal, b) a limited-service niche bank offering such an account via mobile device or card plus POS terminal, c) a mobile network operator (MNO) e-money issuer and d) a non-bank non-MNO e-money issuer. All four models need three components to function: a digital transactional platform, an agent network, and the customer's access device and the various risks associated with each of these components have been detailed in the policy brief. Whether it is deposit insurance, security in transmission and storage of data or operational agent related risks, regulators, policy makers and global standard-setting bodies have to keep abreast of the evolving risk landscape.

As noted in GSMA's 2014 State of the Industry Report on Mobile Financial Services for the Unbanked, India was one of four more developing countries to put in regulation last year allowing non-banks a greater role in the inclusion mission. In 47 out of 89 markets where mobile money is available, regulation now allows both banks and non-banks to provide mobile money services in a sustainable way. As we await RBI's decisions on the applications for Payments Banks in India, Indian banks and non-banks should align themselves with the global trends that show that partnerships and interoperability are both critical for effective financial inclusion.

One of the biggest success stories in digital financial services is M-Shwari, the product of a partnership in Kenya between the Commercial Bank of Africa and mobile network operator Safaricom. Since its launch in November 2012, M-Shwari has brought the full benefits of a banking product (including interest, deposit insurance, and access to credit) to millions of poor, previously unbanked Kenyans, using M-PESA's mobile money infrastructure. In a comprehensive brief on this successful innovation, How M-Shwari Works: The Story So Far, Tamara Cook and Claudia McKay of CGAP examine in detail the working of the product, the profile of customers that have benefited and its impact on financial portfolios. As the first large-scale loan product using a person's mobile operator data to initiate a financial service to make an initial credit-scoring decision, M-Shwari has many lessons for banks, non-banks and policy makers in India.


Section I: Policy – the latest from India's policymakers

Trend of Zero Balance Accounts Under PMJDY-(All-ALL)

Banker-Borrower Interplay: Synergies & Challenges

Shri S.S.Mundra, Deputy Governor, RBI, March 23, 2015

Defeating Poverty: Issues and Challenges

Shri S. S. Mundra, Deputy Governor, RBI, March 20, 2015

Recent Policy initiatives in Credit Information Sharing

Shri R. Gandhi, Deputy Governor, RBI, March 3, 2015


Priority Sector Lending - Persons with Disabilities (PwD) - Inclusion under Weaker Sections Sukanya Samriddhi Account

Section II: News and Views Digest – the latest from India and abroad


Oxigen eyes raising up to $200 million for expansion drive

PMJDY: Improved Financial Inclusion, But Roadblocks Remain

NPCI brings all 56 regional rural banks under RuPay network

Once it bags payments bank license, Itzcash looks to raise Rs 500-600 cr

HDFC, ICICI Banks launch m-pay apps

RBI issues first-round queries for payment-bank applicants

We are already a payments bank: Aditya Puri, HDFC Bank

The made-in-India cashless wonder

India's Top Mobile Wallet App Adds Support For Payments To Bank Accounts

India's central bank drafts contactless guidelines

Cholamandalam open to tie-ups for payments bank

Smart banking

Asia steps up efforts to reach the 'unbanked'

Financial inclusion in focus, but bank loans to micro sector fall 5.5%


The 'Uberification' of Financial Inclusion: What's Possible?

"It's About Life," Not Just Agriculture

Tanzania: Africa's Other Mobile Money Juggernaut

Agent Network Expansion: What Can We Learn from Cote d'Ivoire?

Fraud in Uganda: How Millions Were Lost to Internal Collusion

Mobile Money Moves Forward in Uganda Despite Legal Hurdles

Lessons on Customer Empowerment from Women in Rural India

How Tanzania Established Mobile Money Interoperability

What Could Digital Finance Look Like in 10 Years?

Section III: Research – surveys and studies on expanding access to financial services

Digital Financial Inclusion

Kate Lauer and Timothy Lyman, CGAP, March 10, 2015

Field Guide to Obtaining Customers' Views on Empowerment

Anton Simanowitz and Antonique Koning, CGAP, March 6, 2015

Customer Views on Customer Empowerment, Findings from India

Anton Simanowitz, Antonique Koning and Shweta S. Banerjee, CGAP, March 6, 2015

How Saving Is Influenced by Behavioural Biases

Premasis Mukherjee, Akhand Tiwari and Anup Singh, MicroSave, March 26, 2015

Examining Remittances Through A Behavioural Lens

Premasis Mukherjee, Anup Singh and Akhand Tiwari, MicroSave, March 25, 2015

Examining Micro Credit through the Behavioural Lens

Premasis Mukherjee, Anup Singh and Akhand Tiwari, MicroSave, March 23, 2015

Behavioural Economics and User Centred Design – Opening up New Vistas in Research Processes

Premasis Mukherjee, Anup Singh and Akhand Tiwari, MicroSave, March 16, 2015



Global Lessons on Partnerships for Financial Inclusion

Policy Brief January 2015

Implementing the Pradhan Mantri Jan-Dhan Yojna

Policy Brief November, 2014

Financial Inclusion Metrics-Part I

Policy Brief October, 2014

Financial Inclusion Metrics-Part II

Policy Brief October, 2014

Operationalising Payments Banks for Inclusion

Policy Brief August, 2014

In the media

Probir Roy & Sumita Kale:Is big always best?

Business Standard, 19 February 2015

Do we need banks for financial inclusion?, 17 October 2014


Two Challenges To Help Two Billion Reach Financial Security: Co-authors: Kosta Peric, Jake Kendall

PMJDY: Three questions

PMJDY: Assessing the quality of agents

PMJDY surpasses target before deadline


Editor: Sumita Kale can be contacted at

The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation.

© Indicus Centre for Financial Inclusion. All rights reserved. 31st March 2015


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