Financial Inclusion

The need for financial inclusion is global, and is a need for both the global North and the global South. While successes have occurred, and should be celebrated, we often learn more from failures than from success.

  • Around the same time that mobile penetration crossed lmost 4 billion and mobile based value added services in remittances in Philippines, Kenya began to discuss honestly and candidly why banking services have not been growing and why 60% of mobile-carrying people do not have bank accounts.
  • The 2008-2009 Global Financial Crisis brought out the divide very sharply even in developed countries as well as it is in the emerging and poor countries.
  • It is estimated that in US there are almost 20 million unbanked Americans today

As US governmental agencies like the FDIC and many other agencies are providing better and more refined data regarding financial inclusion in the US, there is strong and vibrant competition to better serve this enormous unmet need and to seek to do so in a profitable manner, thereby creating a wide range of new products, such as prepaid cards of many types.

There has been sharp rise in prepaid and many forms of payment system integration.

In the emerging markets it has become a top policy led drive to make financial inclusion work in tandem with general, long-standing goals targeting development.

Brazil showed the way through its Bolsa Familia programme, as did Mexico through its Opportunidades, and other programmes in many Latin American countries. Kenya and Philippines have showcased their remittance services like M –Pesa, and Gcash, Smart money programmes. Closer to home in Bangladesh and Pakistan, such efforts are also underway, and although in nascent stages, these are showing signs of impressive gains, every month.

India’s drive towards financial inclusion is maturing, having gone through a roller coaster drive and achieved some 100 million no – frill accounts, a very large number of which are dormant and non-functional. So our Finance Ministry and Central Bank are beginning to consider the issues more analytically and acutely, so as to where necessary policy and practices while Indians seek to simultaneously measure up to the challenges of a trillion dollar economy.

What does financial inclusion entail then? Questions are raging as to whether current policy initiatives will actually succeed and pave the way for a better financial inclusion regime.

Will our level and distribution of financial inclusion actually and durably improve? Will there be more bank branches, more ATMS more POS machines, prepaid cards, working with a instrument like Aadhar enabled platform as contemplated in India for the benefits of the unbanked? Despite glitches and start –up hiccups could UID & Aadhar enabled platform be the game changer the world has been looking forward to?

And finally, how does financial inclusion fit with the need for all those firms providing financial services to those who are financially excluded to do so in a profitable manner, yet also a manner that avoids abuse of marginalized groups that are currently financially excluded?

This conference will seek to candidly and forthrightly discuss the real issues that concern financial inclusion without shying away from any uncomfortable truths. Globally, this is a time at which Indians are at the cross roads of all emerging markets and India is in a leadership position for potential success or failure in financial inclusion.

The ongoing efforts to streamline India’s G2P payments, the UID mission, the Aadhar enabled Rupay platform are each examples individually of gigantic efforts which could, if they actually succeed, become a huge game changer. This will enable live and vibrant discussion and the exchange of a variety of thoughtful and knowledgeable views.

For the first time a regulators, businesses, academia, reporters, activists will all informally interact and rub shoulders to find out and advise us all what lies ahead and what we have to do to achieve the thriving economy that India and the sub-continent is striving to achieve.

Ultimately, unless we achieve far higher levels of financial inclusion, all of humanity will find it difficult to grow – not just economically, but also politically, socially, culturally, and in the achievement of the fundamental human rights embodied by the UN Declaration of Universal Human Rights.