Financial Inclusion (FI) is delivery of banking services at inexpensive cost to the vast sections of disadvantaged and low-income groups. There is indeed enormous scope in India , as only 59% of the adult population has bank accounts, with 39% coverage in rural areas against 60% in urban India .
Limited access to affordable financial services such as savings, loan, pension, remittance and insurance services by the vast majority of the population in the rural areas and unorganized sector is believed to be acting as a constraint to the growth impetus in these sectors. Access to affordable financial services - especially credit and insurance - enlarges livelihood opportunities and empowers the poor to take charge of their lives. Such empowerment aids social and political stability.
The Government of India has continued to lay stress on the need for financial inclusion of the under-privileged sections, which have hitherto remained outside the periphery of the banking system. Through a series of new measures announced in its Credit Policy, it has once again shown concern for this segment of population which has been unable to draw benefits from the banking system despite the extensive network of banks.
Banks can not only widen the customer base, but also keep operating costs down by building products around technology . Also, using the services of Non Governmental Organizations / Self Help Groups, Micro Finance Institutions and post offices as intermediaries for providing financial and banking services will augment the client base and will help to move towards 100% financial inclusion. Therefore, redesigning business strategies to incorporate specific plans to promote FI and treating it both, as a business opportunity as well as Corporate Social Responsibility is essential.
FI offers a huge potential for business in terms of resources and assets, and banks therefore need to take aggressive steps to use technology to be able to exploit this potential in innovative and creative ways.
Microfinance Business
Characteristics:
- High operating costs
- High staff costs
- High volume, low value multi-product portfolio
- Spread across a wide geography
- Need for timely and accurate information
The Challenge:
- To improve operational efficiency
- To reach out to a larger numbers across wider geography
- To reduce operational costs
The Solution - DolFin :
DolFin is a comprehensive smart card based transaction automation solution, first of its kind for Microfinance Institutions. DolFin addresses the challenges faced by Microfinance Institutions.
Advantage DolFin:
- Reduces time required for Collections
- Reduces duplicate data entry
- Provides up-to date and timely information
- Provides savings on Staff and Operational costs
To know more about DolFin, click here.
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