While the scope for introducing more inclusive financial products and services is increasing, Indian commercial banks appear to be inordinately slow in leveraging these possibilities. In this newsletter we focus on some examples, which may be considered to be niche individually, but taken together bring out powerful inclusive possibilities. 

Accessibility goes beyond just the provision of a banking outlet as Karpagam Mayavan, the first female visually challenged Advocate at the Madras High Court, pointed out - banks continue to flout RBI guidelines and persons with disabilities. This is not just about ramps for physical access, but also empathy in branches, issuing cheque books, putting in talking ATMs with braille keypads etc. For appropriate service, sensitivity at every level of banking, from the top to the bottom is critical.

IFC-Intellecap has brought out a comprehensive study of women-owned very small enterprises, in which the credit demand has been estimated at Rs. 836 billion ($11.4 billion). The report makes the point that despite women entrepreneurs constituting more than 20 percent of MSMEs in India, women borrowers comprise just 5 to 8 % of formal financial institutions’ portfolios. Do read the report, it has an excellent chapter on how to change the traditional attitudes and meet the finance needs of women-owned businesses specifically.

Yet another vulnerable segment that came on the policy radar just two years ago during the national lockdown is that of migrant workers. In response to the crisis, the government set up registration under the eSHRAM portal to facilitate targeted benefits. However, as Harshita Sinha points out, though the eSHRAM dashboard has extensive data across state, occupation, gender, mode of registration etc., it does not provide any data on the status of workers within occupations. Greater visibility into migrant workers, gig workers, etc. specifically will help not just from a monitoring perspective, but also from a product design and planning perspective. No doubt the EShram portal is an advancement, and we hope it moves towards greater detailed data soon.

At a webinar organised by India Migration Now and Bandhu Urban tech, I spoke on how to improve the role played by Business Correspondents in the delivery of government benefits, while Madhura Karnik from Haqdarshak, Samana Tejani of Gits Food, Madhuri Dhariwal of Indus Action, Kunal Singh of PDAG, and Arushi Gupta of Dvara Research covered their valuable work on the ground. Do also read an interview with Rohit Rathi, where he explains how KarmaLife is working through innovative AI solutions to provide small-ticket finance for non-salaried blue-collar workers.

The RBI has come out with some good moves last month. The framework for geo-tagging of payment system touch points was released. This would be a good time to implement the recommendation made by Indicus Policy Brief November 2015, which was taken up by the RBI Committee on Medium Term Path to Financial Inclusion December 2015 - that is, a harmonised database of financial inclusion footprints, in terms of outlets, service points, devices and agent networks, using a GIS platform. This will enable effective policy intervention for locating infrastructure for financial inclusion. Moreover, it would also help entrants and incumbents in introducing more targeted products and services.

I am glad that the RBI also issued the Master Direction giving the regulatory framework for Microfinance loans directions, where pricing caps have been removed for Microfinance lenders. The move brings NBFC-MFIs on the same level as other such lenders, including banks, and has also been broadly welcomed by industry as supportive to the cause of financial inclusion.

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Do follow our Indicus Centre for Financial Inclusion page on LinkedIn to continue the conversation. Read on here for more of the latest news and views on financial inclusion in India, thanks!

• The RBI launched two key initiatives - (1) UPI123Pay – Option to make Unified Payments Interface (UPI) payments for feature phone users, and (2) DigiSaathi - a 24x7 Helpline to address the queries of digital payment users across products.
• RBI Governor, Shaktikanta Das, inaugurated the Reserve Bank Innovation Hub (RBIH) office in Bengaluru. The RBIH is expected to bring convergence among various stakeholders in the financial innovation space.
• Majorie Chalwe-Mulenga, Yasmin Bin-Humam, Eric Duflos of CGAP put together evidence that shows that digital finance risks hit women hardest.
• On International Women’s Day, Sophie Sirtaine, Jamie Zimmerman, Klaus Prochaska of CGAP write a primer on how to build on COVID-19 progress in women’s financial inclusion.
• Akhand Tiwari, Saloni Tandon, Lakshmi Thangallapally and Jayana Jain of MSC bring out a new framework DEBIT, a tool to understand how women from low and moderate income communities select a channel to conduct financial transactions.
• Indifi Technologies shared results from a survey of 250 women entrepreneurs, which found that securing capital remains the biggest challenge in terms of running a business, followed by managing business operations and securing a credit period from vendors or suppliers.