Financial Inclusion White Paper - NCR

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1.1 Financial Services Rendered Each of the following financial services is readily on offer from banks and financial institutions and is of varying value to the underserved population. The value ascribed to each financial service is based on two important determinants: • The time taken for the service to have an impact on economic status • The rate at which the service makes cash available (velocity) The total value for all financial services cannot exceed 10. Financial Service Impact Time Velocity of Cash Value Savings Account Short Term Very High 2.5 Short Term Loan Short Term High 2 Remittance Short to Medium Term High 1.75 Credit Card Short to Medium Term Medium 1.5 Long Term Loan Short to Medium Term Medium 1 Fixed Deposit Medium to Long Term Low 0.75 Insurance Long Term Low 0.5 1.2 Policy Support Each of the following policy templates has been initiated by governments across the world. Research has shown that combination of more than one policy has had a greater impact. We have arrived at a value for each policy based on two important determinants: • Whether the nature of the policy has a direct or an indirect impact on financial inclusion • Our estimate of the time taken for the selected policy to have full impact Addition of all the policies cannot exceed 0.6. An overall weight will be calculated for application in the EIQ equation based on the summation of the individual values as given below. 43
Policy Template Nature Impact Time Value Task Force/Governing Council/Central Body formed to drive Financial Inclusion Direct Short to Medium 0.12 Special Fund created to assist Financial Inclusion Direct Short to Medium 0.12 Policy/Fund/SPV launched to assist Technology initiatives (research/investment) for wide distribution of banking services Direct Short to Medium 0.12 Central Government Policy with steps towards penetration of the banking services Direct Medium to Long 0.08 Regulation urging participants in the Banking and Financial Services Industry(BFSI) vertical to lay special emphasis on Inclusive Banking Direct Medium to Long 0.08 Policy framework for creation of customized services addressing microfinance institutions, self-help groups, etc. Indirect Short to Medium 0.05 Central Government Policy framework for the alleviation of poverty Indirect Long 0.03 1.3 Technology Solutions One of the most critical links in this equation is the use of a sustainable and scalable technology to deliver financial service. The biggest challenge has been selection of the right technology to deliver a specific service. Several pilots in the past have not met expectations due to either selection of an inappropriate technology or the inherent inability of the selected technology to scale and be sustainable. Our approach is to simplify the technology selection based on its: • Ability to deliver a particular service • Ability to scale • Ease of use (usability) • Ability to eliminate regional/social barriers • Ability to deliver multiple services At a broad level, two delivery methods are available today, namely, Self-service and Business Correspondents. Technology can leverage one or both of these delivery methods for delivery of financial services. Parameter Weight Ability to deliver a financial service 0.12 Ability to scale 0.1 Ease of use “Usability” 0.08 Ability to deliver multiple services 0.06 Eliminates social and regional barriers 11 0.04 11 Barriers to financial inclusion differ from one region to another. Technology deployed must be capable of delivering solutions for regional barriers. For e.g. Language spoken in southern India is different than any state in north India. A multi lingual software is an appropriate solution 44
Page 1 and 2: Do you want to implement a scalable
Page 3 and 4: Acknowledgement Frost & Sullivan is
Page 5 and 6: Table of Contents 1. Introduction t
Page 7 and 8: 1. Introduction to Financial Inclus
Page 9 and 10: Brazil Brazil’s government has ur
Page 11 and 12: 2. India’s Socio-Economic Landsca
Page 13 and 14: Case Study 2S1: Swadhaar Microfinan
Page 15 and 16: Chart 2.b: India’s Regional Split
Page 17 and 18: 2.3 Underbanked bankable population
Page 19 and 20: 4. Financial Inclusion Lifecycle Th
Page 21 and 22: 5. A Feasible Solution for Financia
Page 23 and 24: 5.1.3 Kisan Credit Cards (KCC) The
Page 25 and 26: 5.2 Technology Solutions Technology
Page 27 and 28: Self-service technologies offer pro
Page 29 and 30: Case Study 5S1: M-PESA, Kenya Provi
Page 31 and 32: a customer through the entire trans
Page 33 and 34: 2) Audio-Video lead through Use of
Page 35 and 36: 5.3 Multi Channel Delivery Models 5
Page 37 and 38: 5.3.2 Independent and Shared Access
Page 39 and 40: Case Study 5S4: Mzansi, South Afric
Page 41 and 42: 6. Conclusions India is a country o
Page 43: Measurement System Appendix A criti
Page 47 and 48: 2.2 Measuring the impact of Micro D

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