Promoting Financial Inclusion - United Nations Development ...

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the maximum amount a customer can transfer is `10,000. The beneficiaries of FINO were not necessarily un-banked and maintained savings accounts with other banks also. The customer had the following feedback to offer: New initiatives Remittance services through FINO Timor: FINO Timor is a biometric smart card based NFA product designed for provision of financial services to people living in remote areas. The smart card works as a passbook, ATM card and the machine can perform the functions of authentication of customers, deposit making, withdrawal, mini statement, request for loans and balance enquiry. From October 2010 onwards, FINO has also started a new initiative of providing additional remittance services through its ‘micro deposit machines (MDM)’ or FINO Timor. These stand alone MDMs have been deployed at BC points and enable customer to remit money even in odd hours, depicted in Box C.12 below: BOX C.12: Method of Conducting Remittance through MDM Remitter holds FINO smart card and deposits money in the MDM FINO transaction system Beneficiary’s bank account 62 PROMOTING FINANCIAL INCLUSION
Annexes ANNEX 1: PRINCIPLES OF CLIENT PROTECTION (adapted from: Accion/Campaign for Client Protection www.campaignforclient protection.org) Principle 1: Prevent Over-indebtedness A fi nancial institution measures up to this principle by carefully establishing the borrower’s ability to aff ord the loan and repay it. Clients should be able to handle debt service payments without sacrifi cing their basic quality of life. • MFI’s written credit policies give decision makers (loan officers, supervisors, etc.) explicit guidance regarding borrower debt thresholds. • The loan approval process includes an evaluation of clients’ ability to repay the loan. The loan approval process does not rely solely on guarantees (whether peer guarantees, co-signers or collateral) as a substitute for sound risk management. • Clients receive training/guidance on evaluating their own debt capacity. • The credit decision making procedure and supervision function promote sales force or loan officer accountability for the quality of the loan. • Incentives and productivity targets reward risk management. Productivity targets and incentive systems value portfolio quality at least as highly as other factors, such as disbursement or customer growth. Growth is rewarded only if portfolio quality is high. • The organization ensures product suitability through careful product design and testing with the target market. • Internal audits check household debt exposure, lending practices that violate procedures including unauthorized re-financing, multiple borrowers or co-signers per household, and other practices that could increase indebtedness. Principle 2: Transparent Pricing A fi nancial institution measures up to this principle by ensuring that complete information is made available to customers in clear language that is not misleading and that the customer is able to understand. • Senior management creates a culture of transparency within the organization and develops systems, controls and incentives to support it. • Prices, terms and conditions of financial products are fully disclosed to the customer, including interest charges, insurance premiums, minimum balances required on savings and transaction accounts, all fees, penalties, and whether those can change over time. • Reasonable efforts are made to ensure customers with low levels of financial literacy understand the product, the terms of the contract, and their rights and responsibilities. (Communication addresses client literacy limitations (reading contract out loud, material in local languages) PROMOTING FINANCIAL INCLUSION 63
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Disclaimer: FICCI The information a
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Please contact FICCI at: E-mail: fi
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4.13 Conclusions - inclusion constr
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to this study is greatly acknowledg
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FITF FLCC FMCG FSM GCC GoI HDI ICAI
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x EXECUTIVE SUMMARY
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metropolitan centres so this does n
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• Historical problems such as the
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FIGURE Yields in the Banking System
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1 Background Inclusive economic gro
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financial services as it has implic
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• Providing financial services ac
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The analysis of region-wise credit
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…WHILE PROGRESS UNDER OTHER GOVER
Page 31 and 32: The contribution of SBLP to financi
Page 33 and 34: provide remittance services due to
Page 35 and 36: terms of number of borrowers, the S
Page 37 and 38: 4 The Policy Conundrum - Is It Prud
Page 39 and 40: BCs. These BCs have been able to op
Page 41 and 42: 4.3 MICRO-INSURANCE REGULATIONS 14
Page 43 and 44: crore as grant support for promotio
Page 45 and 46: IMPROVING THE QUALITY OF MANAGEMENT
Page 47 and 48: norms. However, the banks still nee
Page 49 and 50: at the prime lending rates of banks
Page 51 and 52: exchange, loan products and card pr
Page 53 and 54: prefer to transact with banks only
Page 55 and 56: use of smart cards, mobile technolo
Page 57 and 58: • Limited number of FLCCs: One of
Page 59 and 60: savings, and this has ultimately af
Page 61 and 62: 6 The Way Forward The Government of
Page 63 and 64: price for those provided services o
Page 65 and 66: Case Studies of Financial Inclusion
Page 67 and 68: each located at least 1-2 km apart
Page 69 and 70: Officer (CEO) with support from the
Page 71 and 72: course fee to successful candidates
Page 73 and 74: • Commission structure: The BC ag
Page 75 and 76: on a single card. In the field, the
Page 77 and 78: Box C.7 Field Visit Observations fr
Page 79 and 80: operations management and portfolio
Page 81: convince new account openers to obt
Page 85 and 86: • Customers are informed of their
Page 87 and 88: Distance criterion Payment of commi
Page 89 and 90: Financial Inclusion Fund Promotion
Page 91 and 92: Package Key features Reforms in the
Page 93 and 94: Activities Amendments of rules and
Page 95 and 96: Activities Computerisation Status G
Page 97: RBI, 2009, “Financial deepening b
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