3.3 billion people financially included, says World Bank

The latest Global Findex report points out that South Asia has the largest gender gap when it comes to financial inclusion

In the past three years, nearly 700 million adults became part of financial inclusion services around the world, according to a World Bank report. This reduced the number of unbanked individuals to 2 billion from 5.3 billion.

Financial inclusion is measured by Global Findex, a World Bank agency, as having an account that allows adults to store money and make or receive electronic payments. It is critical to ending global poverty.

The findings were published in the latest edition of the agency’s publication.

“Access to financial services can serve as a bridge out of poverty. We have set a hugely ambitious goal —universal financial access by 2020—and now we have evidence that we’re making major progress,” said World Bank Group President Jim Yong Kim.

The report says that around 700 million people either became account holders in banks or other financial institutions or had access to mobile money service providers or both between 2011 and 2014.

However, the report did not take into account India’s effort to financially include 130 million people last year. The country’s effort started in August 2014 and went on till January 26, 2015. It will be considered in the next report.

When asked about target 2020 for achieving financial access for all, Kim said, “This effort will require many partners—credit card companies, banks, microcredit institutions, the United Nations, foundations and community leaders. But we can do it, and the payoff will be millions of people lifted out of poverty.”

According to the report, the percentage of adults having an account increased from 51 per cent to 62 per cent between 2011 and 2014. This trend was driven by an 11 percentage point rise in account ownership in developing countries and the role of technology.

Mobile money accounts in sub-Saharan Africa also played an important role. This helped in rapid expansion of financial services. The World Bank data also show opportunities for boosting financial inclusion among women and the poor.

The report lays emphasis on the importance of financial inclusion, stating that broader access to and participation in the financial system, can actually boost jobs, increase investments in education sector and directly help the poor manage risk and absorb financial shocks.

Gender gap in South Asia
The report does not paint a rosy picture of South Asia as the region witnessed the largest ever gender gap in financial inclusion. Around 37 per cent women in this part of the world hold bank accounts as compared to 55 per cent men. With 18 percentage point gap between genders, it is the highest gap in the world.

The global gender gap has consistently stayed at 7 per cent. In 2011, 47 per cent women and 54 per cent men had accounts and in 2014, 58 per cent women had accounts as compared to 65 per cent men.

More than half of the adults in 40 per cent of the poorest households in developing countries were still without bank accounts in 2014.

The Findex report says there is still lot to be done to expand financial inclusion among women and the poor.

Financial Inclusion for NSDC trainees

National Skill Development Corporation (NSDC), along with Central Bank of India and MasterCard, a leading global payments solutions provider, announced the launch of a customised payments solution for youth trainees who successfully complete specific skill development programmes run by NSDC.

Each trainee participating in the Standards Training Assessment and Reward (STAR) Scheme, run by NSDC, will be financially included through the opening a zero balance bank account and a MasterCard Debit Card. The monetary reward for the course will be directly deposited into these accounts upon the unique identification of the trainee and successful certification post completion of his/her course. In addition, trainees will have access to mobile banking, internet banking with e-commerce facilities, and accidental insurance of Rs 1,00,000.

This initiative is in line with the government’s vision of promoting financial inclusion and delivering comprehensive financial tools to the financially excluded low-income households.

So far, Central Bank ofIndia has issued MasterCard Debit Cards to over 2,00,000 trainees – the largest issue in this project – and has signed MOU’s with over 50 training partners across India to roll out this project.

- See more at: http://digitallearning.eletsonline.com/2014/09/financial-inclusion-for-nsdc-trainees/#sthash.1olC7M3j.dpuf

Sep 01 2014 : The Economic Times (Delhi)

MONDAY Musings - Fin Inclusion: SBI Aims to Create Savings Habit

B SRIRAM MANAGING DIRECTOR, SBI





Public sector banks are always at the receiving end when it comes to their adaptability to latest developments. But the State Bank of India is moving aggressively to remain relevant in a market which is set to witness a revolution with differentiated banks, says B Sriram, managing director, in an interview with Sangita Mehta and MC Govardhana Rangan. Edited excerpts:There is a lot of noise about financial inclusion. What will be its impact on the real economy?
It will have a big impact. We are looking at 10-12 crore accounts to be opened. It's not only opening accounts, they will have balance, there will be transactions, it will have multiple products like pension, insurance and even loan products at a later stage. In phase one, we are looking at opening accounts and creating the habit of savings in all citizens. In phase two, we are looking at bringing all these products to the customer so that not only the banking system develops on that, but the whole economy gets a boost.
There would be payment banks and small banks which would be nimbler than you are in reaching customers and their costs will be low. How do you compete?
I do not see them as competitors. They would be players in the economy like us, in a localised way. They have certain restrictions in the way they operate. They would collect small deposits and invest only in treasury instruments. So, to that extent, they are not in a loan market and they have their role defined by the RBI. They have their own niche in the market either they can be in combination with the bank, or they can be on their own.The intent is you add or multiply. You don't divide and subtract. The purpose is every citizen in every nook and corner of the country has access to banking service or whatever remittance service that payments bank would give is made available to him as close as possible. It is a question of synergy and it's not that they will take my business, or I will take their business.
For long, rural areas were neglected on the pretext that they are not profitable. Has that changed?
I don't subscribe to the view that small-ticket loans are not profitable.For SBI, the CASA (Current Accounts Savings Accounts) franchise is coming out of rural and semi-urban areas.There are circles that drive 60-70% CASA, including the North-East and Odisha. Circle-wise if you see the demography, the more rural or semi-urban you are, the higher the CASA is. They are as important as the big businesses. They have to be served in a way that they remain with the bank. Like small drops in an ocean, these are things that make SBI. There is a character of continuity in terms of benefits available to the bank and they would not swipe in ­ swipe out easily.
Now, every one is talking about the bottom of the pyramid customers.How would SBI differentiate?
SBI was a pioneer in SSI (small scale industries) sector and so, we have a huge level of expertise in financing this sector. Most of the financing we do today is slightly different from what it was. From manufacturing, it has extended to services, it has gone to realty, it has gone to channel financing, vendor, and dealer finance.The full cash flow of the customer is captured by the bank. So, the business model has changed. We have developed products to capture this.
We also have cash management products which are robust and well known. We have also gone in a big way to cash pick-up for SME customers.Here, the cash is picked up at customers' area either at the shop or jeweller once or twice a week and then, it is credited in their accounts.This gives us some CASA balances.
Are not private sector banks better at doing this?
We are also mapping SME clusters to certain branches and creating certain products for those branches. We are also creating specialised position ­ relationship managers small enterprise ­ they will look at the segment between ` . 10 . 1 crore to ` crore and they would be trained in processes and delivery and also in lead generation. How to capture leads?
How to go and market and handling of the account?
Is not the competition from private lenders increasing here as they also feel that urban markets have saturated?
There is no doubt that we have to be a banker of choice. We have the best brand, we have the best reach, we have the best personnel, best IT. But all this best will work only if we are the bank of choice to the customer. For that, it is very essential that our whole system is driven towards being customer friendly and customer focussed. For this, we are rolling out digitised branches. We want to show to customers that we could be as efficient as any of the bank in the world.
How different is that in enhancing the customer experience?
For example, if a person wants a car loan, he has to go to various showrooms to choose the car and go to the bank and try to get a loan. In these sorts of digital branches, he can at the touch of a screen will get all the latest models that are available, their prices in various cities. The moment he chooses the dealer, he can, at the touch of a screen, calculate how much loan he would require, and what would be the monthly payment. Next, for home
loans, we would put on the site all the projects that are approved by SBI and based on this, the customers can choose the right fit whether he wants 10-15 year home loan. Is technology becoming more important than finance expertise?
It has to be a mix of both. We are at an advantageous situation because of our brick-and-mortar branch strength.The strategy is two-fold, grow brick and mortar and at the same time also grow the digital way. There is market for both. The greatest strength of the bank today is its reach.
But e-transactions are still low in the country.The percentage of our transaction through the electronic route is touching 40% and the idea is to ramp it up to 60%. When that happens, that will automatically de-clutter our branches to some extent.
But that may change if your bank starts charging customers for ATM transactions?
I don't think so. Because people would rather pay for the transaction rather than come to the branch. Charges are not so heavy that they would like to come and stand in the queue. A cup of tea also today costs ` . 10. In that context, it is not a very large sum.
There is a lot of hope now when it comes to the economy. Do you see any thing on the ground?
Lots of activities are happening at the ground level. The PM himself is monitoring various things very closely. Overnight, you can't have new projects and suddenly investors come pouring in. But there is an intention on the part of corporates to try and raise resources, try to reduce their debt and clean up their balance sheets and then to look ahead and see where there is scope for enhancement. In manufacturing, the inventories that were built up are now starting to recede.
If economy revives, there could be an increase in demand for funds.Will that put pressure on interest rates?
I don't see any increase or decrease. It will remain more or less at this level.Two-three factors are being looked at.One is the targeted inflation figure, and the other is the revival of the growth cycle which takes at least a few quarters. Also, the stressed assets in the economy are still there. So, looking at all these factors, I can't see an increase or decrease.

Aug 29 2014 : The Times of India (Delhi)

Big bang start: Record 1.5cr accounts opened in a day

New Delhi: TIMES NEWS NETWORK





Govt Kicks Off Mega Financial Inclusion Plan

Prime Minister Narendra Modi on Thursday launched one of the biggest inclusion programmes, calling for an end to “financial untouchability“ and urged banks to connect every person across the country .Spreading the banking net wide is one of the key policy focus areas of the Modi administration and the launch of the scheme within 100 days of the government signals its commitment to take on the challenge of executing mega programmes.The Jan Dhan Yojana, the massive financial inclusion drive, aims to open 7.5 crore bank accounts and provide banking facility to the vast segment of the population which still remains cut off from the financial system.Under the scheme, a person opening an account will get a Rupay debit card, a Rs 1 lakh accident insurance policy as well as a Rs 30,000 life insurance cover.
The facility of an overdraft would be added to the accounts after keeping a watch on the credit history and operation of the accounts for six months.The Centre had to defer the facility as banks had expressed concern over the move. Minimum pension of `1,000month
The Centre has decided to implement two crucial decisions -minimum monthly pension of Rs 1,000 and a higher wage ceiling of Rs 15,000 for social security schemes run by retirement fund manager EPFO -from September 1.
f Mahatma Gandhi worked to I remove social untouchability, if we want to get rid of poverty, then we have to first get rid of financial untouchability ,“ PM Narendra Modi said in an extempore speech which drew loud applause. “We have to connect every person with the financial system. And for that this programme has been given impetus,“ he said, adding, “when a bank account is opened, it's a step towards joining economic mainstream.“
Modi took the opportunity to drive home broader message behind the programme to fight poverty . Using anecdotes from his life, the PM highlighted the importance of savings, financial discipline, shoring up governance and managing big ticket government programmes. Cabinet ministers and chief ministers fanned out across India on Thursday to launch the programme simultaneously from 600 locations.More than 77,000 camps were set up by banks to open accounts and finance minister Arun Jaitley announced that the government will achieve the target of opening 7.5 crore accounts before January 26, 2015, well ahead of the earlier schedule of August 15, 2015.
The PM said the nationwide success of the enrolment drive on Thursday would give confidence not just to the officials of the finance ministry and the banking sector, but also to those across the government, that they can achieve goals they set for themselves.
For the full report, log on to http:www.timesofindia.com