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FINANCIAL INCLUSION
PRESENTED BY- Nitish sen
DEFINATION
• The process of ensuring access to The process of ensuring access to financial services and timely and financial services and timely and adequate credit where needed by adequate credit where needed by vulnerable groups such as weaker vulnerable groups such as weaker sections and low income groups at an sections and low income groups at an affordable costaffordable cost
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WHY FI TARGETTING THE WEAKER SETIONS
• 37.7% of Indian households do not have access to a nearby water source
• 49% do not have a proper shelter• 69.5% do not have access to suitable
toilets• 85.2% of Indian villages do not have a
secondary school and• 43% of Indian villages do not have an all-
weather road connecting them
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FI essential
For inclusive growth which is necessary for sustainable overall economic growth
– In developed economies, focus is on small population
– In developing economies (India), focus is on majority excluded
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Types of Financial Exclusion
(i) exclusion from payment system : not having access to bank accounts
(ii) exclusion from formal credit markets leading to approaching informal/ exploitative markets
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Benefits of Greater FI
• For the common man–escape from the clutches of For the common man–escape from the clutches of money lenders; sending / receiving remittances; no money lenders; sending / receiving remittances; no need to hold savings in cash etc.need to hold savings in cash etc.
• For the banks–achieving access to a large For the banks–achieving access to a large untapped pool of customers.untapped pool of customers.
• For the Govt.-ensuring flow of aid / grants to the For the Govt.-ensuring flow of aid / grants to the targeted beneficiary.targeted beneficiary.
• For the RBI -spread of banking culture and For the RBI -spread of banking culture and extension of the reach of formal financial system.extension of the reach of formal financial system.
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Financial Inclusion - Scope
• Financial Inclusion should include access to Financial Inclusion should include access to financial products and services like,financial products and services like,
– Bank accounts – check in accountBank accounts – check in account– Immediate Credit Immediate Credit – Savings productsSavings products– Remittances & Payment servicesRemittances & Payment services– Insurance - HealthcareInsurance - Healthcare– MortgageMortgage– Financial advisory servicesFinancial advisory services– Entrepreneurial creditEntrepreneurial credit
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04/11/23 JKSHIM, Nitte, India 8
Financial Inclusion
Credit CardsBank A/Cs - Savings
Empowerment of SHGs
Insurance
Lack of Assets (for Collateral)
Affordable CreditFinancialAdvice
Payments +Remittances
Financial Inclusion : The Indian Perspective
Measures for promoting financial inclusion
• Products
–No frill account–KYC norms simplified–Introduction of GCC–OTS for overdue loans upto
Rs.25,000/-–KCC
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What Have We Achieved
• Number of No-Frill Accounts – 28.23 million (as on Dec.
31, 2009)
• Number of rural bank branches – 31,727 constituting 39.7% of total bank branches (as on June. 31,
2009)
• Number of ATMs – 44,857 (as on May 31, 2009)
• Number of POS – 4,70,237 (as on May 31, 2009)
• Number of Cards – 167.09 million (as on May 31, 2009)
• Number of Kisan Credit cards – 76 million• Number of Mobile phones–403 million (as on Apr.30,
2009)
– out of which 187 million (46%) do not have a bank account
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Problems / Difficulties
• Scaling up of activities• Transaction cost too high• Appropriate business model yet to
evolve• BC model too restrictive• Limitation of cash delivery points• Lack of Interest / Involvement of
Big Technology Players
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CURRENT NEWS
• Financial inclusion scheme rolled out in bihar on Aug 28,2010
Glodyne Technoserve, a technology services company in partnership with the Government of Bihar has rolled out rural Financial Inclusion services in the state providing banking facility to the 25 million ‘E-shakti’ MNREGS (National Rural Employment Guarantee Scheme) project. The scheme was rolled out by Chief Minister of Bihar, Mr. Nitish Kumar on Friday in Patna.
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Contd…
• Financial inclusion regulation center launched by CGAP on Aug 21,2010
Plugging the information gap on financial inclusion laws and regulations, the Consultative Group to Assist the Poor (CGAP) has launched a Financial Inclusion Regulation Center, which provides a broad, timely collection of the laws and regulations most relevant to key financial inclusion topics
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Thank You