Financial Inclusion : The Task

Krishan Jindal
 Financial Inclusion -
Definition

Delivery of financial services at an

affordable cost to vast sections of
disadvantaged and low income
groups
 Financial Services includes

Savings
Credit
Insurance
Remittance facilities etc.
 NSO Survey (2003) on
indebtedness of farmers
 27% farm household only have access to
formal credit sources.
 Only 4% in NE Region have access to formal
sources.
 Only 20% in NE Region borrow both from
formal and informal sources (Tripura State –
49%)
 More exclusion among marginal farmers and
tribal families.
Demand Deposit Bank Accounts

 41% population do not have

a Demand Deposit Bank
account
 61% unbanked in rural areas
 63% unbanked in NE Region
(62% in Tripura State)
Number of Loan Accounts

 14% of adult population has

loan accounts
 9.5% in rural areas
 7% in NE Region
Why Financial Inclusion ?
 Hightransactions costs of
borrowers
 High transactions costs of savers
 High transactions costs of banks
 High risk cost
 Inappropriate products
Who are excluded ?
 Marginal Farmers
 Landless Farmers
 Oral Lessees
 Self Employed
 Urban slum developers
 Migrants
 Minorities
 Social excluded groups
 Senior citizens
 Women
 Measures for promoting
financial inclusion
 Products
No frill account
KYC norms simplified
Introduction of GCC
OTS for overdue loans upto
Rs.25,000/-
KCC
 Measures for promoting
financial inclusion
 Use of intermediaries
Linkage of SHGs with bank
29 lakh SHGs credit linked
42 million families covered
Linkage of MFIs with banks
Business facilitators and
correspondence model.
 Measures for promoting
financial inclusion
 Others
IT solution for financial inclusion
Credit counseling and financial
education
Revamping of RRBs and
cooperative banks
Funds for Financial Inclusion
 Micro Finance Development and
Equity Fund
 Financial Inclusion Fund for
Development and Promotional
Interventions
 Financial Inclusion Technology Fund
to meet cost of technology
 Financial Inclusion :
Challenges
 Holistic approach
 Viability
 Scalability
 Adoption of technology
 Use of intermediate agencies.
Thank you