December Newsletter


Financial services are going through a digital transformation, that has a strong impact on inclusion. In India, digital lending is taking off, with a rise in online consumer lending. A new report, “Credit Disrupted: Digital MSME Lending in India”, by Omidyar Network and Boston Consulting Group, estimates the potential of digital lending to MSMEs as a 10 - 15 fold increase touching $80 - 100 billion in annual disbursements by 2023. However, as pointed out by Graham Wright in a blog post, technology brings with it both opportunities and threats and he identifies the explosion of digital consumer credit in its current form as a threat, rather than an opportunity.

Here, the RBI should take lessons from the experiences in Kenya and Tanzania, where loan delinquency rates from digital credit are high. It is important to monitor the trends in the industry and enforce strong customer protection measures; exercises like CGAP’s transaction data analysis with the Bank of Tanzania may be a useful template for the RBI to follow. CGAP research shows that regulators can do a lotto ensure improved transparency on loan terms and conditions, better credit screening models, encourage widespread deliberations on product suitability etc.

However, a recent undercover report by ET Wealth revealed that banks continue to mis - sell insurance and other financial products, despite the RBI’s directive a year ago. Clearly, the RBI needs to take customer protection more seriously, and monitor more closely, rather than leave grievance redressal to ombudsmen. Digital credit can be a boon or a bane for inclusion, it is for the regulator to lay down the appropriate path for providers.


• Towards a Mature Digital Payments Market for India - ICFI Policy Brief October,2018
• ICFI Blog: Emerging Pivotal Role of NPCI, October 2018
Pradhan Mantri Jan Dhan Yojana Progress Report
RBI Electronic Payment Systems – Data


Fintech For Inclusion: Challenges And Opportunities

DBT for power: Prepare the ground first

With customers' nod, banks keep using Aadhaar for e-KYC

Examining mobile banking as a tool for financial inclusion in India

Half of India's ATMs may shut down by March 2019, warns industry body

Banking a billion: India's thrust on digital economy propels country towards financial inclusion, societal transformation

Financial inclusion: Industry participants will need to redouble their efforts

Truecaller Pay to go live will Bharat Bill Payments Service in December

Foreign digital payment cos expect sharp increase in operating costs in India

What APIs Are Digital Financial Services Providers Opening?

Digital Credit Helping to Put Kids in Classrooms in Cote d'Ivoire

Cybersecurity for Mobile Financial Services: A Growing Problem


CGAP National Surveys of Smallholder Households, CGAP, November 2018
I-SIP Toolkit: Policy Making for an Inclusive Financial System, CGAP, November 2018
High-Saving Youth in Smallholder Households: An Untapped Market, CGAP, November 2018

Editor: 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. ©Indicus Centre for Financial Inclusion. All rights reserved. 30th November 2018.

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