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Banking:
India financial sector, guided by the Central Controller, THE Reserve Bank of India (RBI), has been on a constant endeavour to expand its base and bring the entire country within the umbrella of formal banking system with a view to improve access to basic financial services in both the Urban and Rural Areas within the country. Though the urban public and private sectors have enjoyed the benefits arising out of initiatives of the RBI the rural sector has largely been highly regulated and has shown sluggish growth in spite of creation of Regional Rural Banks (133 in 2006) and Rural Co-operative Credit Institutions (1,09,924 in 2006) on account of basic challenges that the formal banking sector encounter in its day to day operations. Some of the challenges have been...
Appropriate methods of pinpointing Customer Identification & location presence leading to high customer acquisition costs
Delays due to need for guarantors and third party collateral requirement in serving the end customer
In ability to point out productive customer clusters consequently leading low foot falls in rural branches. Branches that registers high number of foot falls, suffer from customer dissatisfaction as end customers have to typically travel a great distance to reach a bank branch. Consequently leading to delayed banking interactions on behalf of the customers.
Low value, small ticket transactions typically seen in the rural sector
Spread out geography hampering the growth of branch based operations due to high capital investments to support a branch
Largely manual operations in rural braches leading delayed decisions by typical Bank Head offices Despite considerable expansion of the banking system in India, large segments of the country is population do not have access to banking services. Government of India has officially vide a recent speech by the Finance Minister Mr. P Chidambaram acknowledged that almost 60 to 80 per cent of enterprises and individuals within the country lack access even to basic financial services such as savings credit and, insurance services. In a country as vast as India this translates to a very large number of (potentially over 500 million) 'unbanked' people - two times the entire population of the US .The banking arena in India, over the last decade has undergone a substantial change. The concept of banking evolved by the use of Internet, phone and ATMs have made 'anywhere banking' possible and has though transformed the urban mainstream, have left the rural segment totally untouched.
India financial sector, guided by the Central Controller, THE Reserve Bank of India (RBI), has been on a constant endeavour to expand its base and bring the entire country within the umbrella of formal banking system with a view to improve access to basic financial services in both the Urban and Rural Areas within the country. Though the urban public and private sectors have enjoyed the benefits arising out of initiatives of the RBI the rural sector has largely been highly regulated and has shown sluggish growth in spite of creation of Regional Rural Banks (133 in 2006) and Rural Co-operative Credit Institutions (1,09,924 in 2006) on account of basic challenges that the formal banking sector encounter in its day to day operations. Some of the challenges have been...
Appropriate methods of pinpointing Customer Identification & location presence leading to high customer acquisition costs
Delays due to need for guarantors and third party collateral requirement in serving the end customer
In ability to point out productive customer clusters consequently leading low foot falls in rural branches. Branches that registers high number of foot falls, suffer from customer dissatisfaction as end customers have to typically travel a great distance to reach a bank branch. Consequently leading to delayed banking interactions on behalf of the customers.
Low value, small ticket transactions typically seen in the rural sector
Spread out geography hampering the growth of branch based operations due to high capital investments to support a branch
Largely manual operations in rural braches leading delayed decisions by typical Bank Head offices Despite considerable expansion of the banking system in India, large segments of the country is population do not have access to banking services. Government of India has officially vide a recent speech by the Finance Minister Mr. P Chidambaram acknowledged that almost 60 to 80 per cent of enterprises and individuals within the country lack access even to basic financial services such as savings credit and, insurance services. In a country as vast as India this translates to a very large number of (potentially over 500 million) 'unbanked' people - two times the entire population of the US .The banking arena in India, over the last decade has undergone a substantial change. The concept of banking evolved by the use of Internet, phone and ATMs have made 'anywhere banking' possible and has though transformed the urban mainstream, have left the rural segment totally untouched.
Why Focus on Technology?
Technology increases the efficiency of microfinance institutions (MFIs), eventually resulting in lower interest rates to borrowers and new loan programs that attract additional clients and expand opportunities for the MFI and the borrower to become self sufficient. We are transforming the microfinance sector through innovations and collaborations that improve the delivery of financial services to the poor and integrate microfinance with the global financial system.
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