India: Financial Services Use and Emerging Digital Pathways
The report draws from two sources: a) The Tracker Survey: A nationally representative survey of 45,024 Indian adults on access and use of financial services, as well as barriers and potential for future use and b) The Digitized Government Payments Study: A qualitative study with government-payment beneficiaries across four districts in the state of Maharashtra, focusing on the potential for digital government payments to expand financial inclusion. The highlights of the report are as follows:
The financial services market in India is characterized by a high reliance on cash. Most borrowers rely on those within their personal networks, including relatives, neighbours and friends (67 percent). 11 percent of borrowers borrow from a bank, 12 percent borrow from a private money lender and 4 percent borrow within their savings group.
Usage of banking services is low; access does not lead to usage. 48 percent of respondents have accessed a bank account and 25 percent of respondents actively use a bank account. Only 54 percent of bank account holders have used their bank accounts actively (i.e. in the past 90 days).
There are disparities in access and active use of bank accounts across gender and location within states that often mirror socio-economic differences in India e.g. borrowing through informal channels such as money lenders is more prominent in Bihar.
Nationally, 35 percent of all beneficiaries receive direct deposits. 12 percent of survey respondents said they receive payments from the government (excluding government salary payment). The majority of payments are received in full, but 13 percent, nationally, said they have to pay a bribe to be able to access their payments, regional variations exist.
Section I: Policy – the latest from India’s policymakers
· Role of NBFCs in Financial Sector: Regulatory Challenges
Shri R. Gandhi, Deputy Governor, RBI, June 16, 2014
· Banks in India: Challenges & Opportunities
Shri Harun R Khan, Deputy Governor, RBI, June 12, 2014
· New-Gen Urban Cooperative Banks - Some Musings
Shri R. Gandhi, Deputy Governor, RBI, June 8, 2014
· Recognizing E-Aadhaar as an ‘Officially Valid Document’ under PML Rules
· Financial Inclusion by Extension of Banking Services – Use of Business Correspondents
· One Documentary Proof of Address - RBI further simplifies KYC Norms for Bank Accounts
Section II: News and Views Digest – the latest from India and abroad
· Queen Maxima hails India’s financial inclusion goals
· Financial inclusion: Govt tells banks to open 20 cr accounts in next 1 yr
· Aadhaar lives on: RBI tests UID-based mobile fund transfers
· 'Use financial inclusion transaction data to design development schemes'
· New financial inclusion plan to kick off from August 15
· Financial inclusion: It all started in the 1960s
· Oxigen Makes Strategic Suggestions to Drive Financial Inclusion under RBI Pilot Scheme
· Madhya Pradesh receives SKOCH Financial Inclusion and Deepening Award
· Innovative financial inclusion models are the only solution
· 'Relaxation in KYC norms a big boost for financial inclusion'
· 'Full financial inclusion a pipe dream'
· Whose Cash Is It Anyway? Several Agent Solutions to Cash Security
· Expanding Access to Finance for Small Businesses in India: A Critique of the Mor Committee’s Approach Part 3. Assessing Access to Finance for Small Businesses?
· Can a Digitized Post Realize India’s Financial Inclusion Dreams?
· Challenges to Agency Business – Evidence from Tanzania and Uganda (Part- I)
· Who Is The User In “User-Centred Design”?
· Bringing Mobile Wallets to Nigerian Farmers
· Why Equity Bank Felt It Had to Become a Telco – Reluctantly
· What Next for Remittances and Money Transfers in the Pacific?
· Three Lessons from Mobile Microinsurance in Bangladesh
· Power of the Persona: Applied Product Innovation with Bank BTPN
· Indonesia: Anatomy of a Successful Human-Centered Design Project
· Making Sense of Financial Inclusion Data Sources
· Annual reports show mobile money remains a strategic priority for MNO groups
· Remote Account Opening: Making it Work for Mobile Money
Section III: Research – surveys and studies on expanding access to financial services
· Applying Behavioral Insights in Consumer Protection Policy
Rafe Mazer, Katharine McKee and Alexandra Fiorillo, CGAP, June 26, 2014
· Customer-Centricity for Financial Inclusion
Tanaya Kilara and Elisabeth Rhyne, CGAP, June 16 2014
· Serving Smallholder Farmers: Recent Developments in Digital Finance
Jeremiah Grossman and Michael Tarazi, CGAP, June 11, 2014
· Observations and Lessons for the I‐SIP Methodology from Pakistan
Stefan Staschen, CGAP, June 10, 2014
· Self Assessment Risk Management Toolkit – Summary
GSMA, June 2014
Financial Inclusion- Two priorities for India's New Government
Policy Brief June, 2014
Regulatory Trends for Financial Inclusion: Lessons from Brazil
Policy Brief January, 2014
In the media
· Column: Fix Aadhaar, don't junk it
Financial Express, 27 June 2014
· Getting financial inclusion back on track
Mint, 20 June 2014
· Column: UPA's Aadhaar miss
Financial Express, 03 May 2014
· Innovation in payment banking
Mint, 18 April 2014
· More positive moves from the RBI
· RBI relaxes KYC address proof
· Getting DBT right