Financial Inclusion - News And Views - October 2017


It is time for India to change its financial inclusion policy approach, to desist from micro-managing banks and move to monitoring progress, rather than mandating targets.The 2017 Brookings Financial and Digital Inclusion Project Report has once again given India a 100% rating on the parameter, “Country Commitment” to financial inclusion; the rating on the “Regulatory Environment” parameter has increased from 94% to 100% over the year. However, before the government and RBI pat themselves on the back, we continue to score a low 44% on the crucial parameter,“Adoption of traditional and digital financial services”. India has been steadfastly following a bank-led model for financial inclusion for more than a decade now. Rather than leave it to the market, the RBI and the government have preferred mandating targets to banks for increasing coverage and number of basic or PMJDY accounts.

Of the 26 countries studied in the Brookings report, Kenya tops in adoption of traditional and digital financial services with a 78% rating, and it is not just mobile money. Contrary to popular belief that banks would be crushed by the M-PESA juggernaut, the number of bank accounts has now surpassed mobile money accounts. As pointed out by William Cook and Claudia McKay in a CGAP study, Banking in the M-PESA Age, banks have responded to M-PESA in three ways : a) Direct competition over a mobile channel, such as through Equity Bank’s mobile product Equitel, b) Collaboration with mobile money providers to offer banking services, such as through CBA’s M-Shwari and c) Industry coordination to create alternatives to existing mobile money products, such as the small-dollar interoperability scheme introduced by the Kenya Banker’s Association (KBA).

India should now allow the forces of competition, collaboration and coordination to play out under regulatory supervision. Adoption of formal financial services will then follow automatically.

Source: Cook, William, and Claudia McKay. 2017. “Banking in the M-PESA Age: Lessons from Kenya.” Working Paper. Washington, D.C.: CGAP


Consumer Grievance Redressal in a Digital World - August 2017 – ICFI Policy Brief August,2017
Inter-operability amongst KYC compliant PPIs shall be implemented within six months: RBI
Master Directions - Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017


Jio Payments Bank likely to launch in December
India's 1.55 lakh post offices to offer payments bank service
Payments banks are feeling restricted, worry about getting customers to transact
No exclusive pacts for India Post Payments Bank
Decoding PMJDY, an intriguing work in progress
Having a bank account can change a woman's life: Gates report
How to create demand for financial services; hand-holding clients, meeting their financial goals a must
India moves closer towards achieving its goal of financial inclusion
India must enhance implementation of financial inclusion policies: IMF
Direct Benefit Transfer (DBT) in Fertiliser – Towards an Efficient Fertiliser Distribution System
Merchant Payments: What About the Customers?
Merchant Acquiring: Why Winning Is the Wrong Approach
Want Your Customers to Save More? Use Behavioral Economics
Will Digital Payments Unlock Financial Access for Small Business?
From Data to Customer Insights: 3 Tips for Providers
A $1.5 Trillion Tip on Cracking Merchant Payments


Agent Network Accelerator Research - Pakistan Country Report, MicroSave and Helix Institute, September 2017
Finclusion to Fintech - Product Development for Low-Income Markets, Helix Institute, September 2017
Drowning in Data, Searching for Information: The Role of Funders, CGAP, September 2017


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. 6thOctober 2017

Copyright © 2015 - All Rights Reserved