Financial Inclusion White Paper - NCR

1. Introduction to Financial Inclusion
About 2.9 billion 1 people around the world do not have access to formal sources of
banking and financial services.
In India alone 560 million 2 people are excluded from formal source of finance, a
figure in tight correlation with the 41.6 percent (457 million) of the populace that
still lives below the poverty line (US$1.25/day).
While India has enjoyed growing domestic demand and globally recognized
prowess in the areas of information technology, automotive, life sciences,
telecommunications and even space exploration, its continued success and growth
as an economic power (in common with other emerging economies) can only be
assured if concrete steps are taken to ensure that the social and economic
development is inclusive.
a. The role of Government
The importance of financial inclusion to
national economies is evidenced by the
support of individual governments as well
as international bodies around the world.
The United Nations Capital Development
Fund (UNCDF), which is present in 33 of
the identified 50 Least Developed
Countries 3
(LDC), invests in local
development and inclusive finance with a
total program portfolio amounting to
US$130 million. UNCDF’s vision of
inclusive finance is to offer appropriate
financial services to all segments of the
population to be supported by sound
government policies, legal and regulatory
frameworks and infrastructure. UNCDF
has been instrumental in taking innovative
approaches to build inclusive financial
sectors to help them reduce poverty and
achieve inclusive growth.
“Financial Inclusion is Critical
to achieve inclusive growth;
which itself is a sin qua non for
sustainable economic growth
and development. Harnessing
the power of technology is one
of the most effective ways of
integrating the unbanked
population into the financial
mainstream. Technology
enables the provision of a host
of services from depositing
money into various government
schemes to micro loans and
micro insurance
P Chidambaram, Home Minister,
(Former Finance minister),
Government of India - In a
message to Frost & Sullivan for
the IT enabled Financial
Inclusion event on 18th
Sept ’08
Similarly, the International Financial Corporation (IFC), a member of the World
Bank, supports numerous causes designed to support the proliferation of financial
inclusion.
1 World Bank, United Nations
2 Source: National Sample Survey Organization
3 Least Developed Countries (LDC) are low income countries, where according to the United Nations;
growth faces long-term impediments – such as structural weakness and low Human Resource Development.
(“High Income Economies” have GNI per Capita of $11,456 or more: World bank criteria)
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