Digital Ways of Financial Inclusion ! 

It is proverbial to say that there are many Indias within India. In terms of inequality, it is popularly reiterated that on the one hand, there is India, educated, rich and in sync with the world, and on the other hand, there is Bharat, poor, illiterate and cut off from the mainstream. The rural-urban divide largely sums up the challenge India faces- to create equity between those who have access to basic facilities and government mechanisms and those who do not have. This is the reason why financial inclusion is such a dominant theme of the present day government at the Centre. The government seems to believe that Digital India is the answer to conundrum called financial inclusion. 

The World Bank report on ‘Improving Access to Finance for India’s Rural Poor’ begins with the argument that ‘well developed and inclusive financial systems’ are associated with more ‘rapid growth and better income distribution’. It can provide the poor the opportunity to ‘get a foothold in the modern economy’ and it is this sort of vision articulated as- ‘building inclusive financial systems that work for the poor’. This is an alarming situation as a nation and society. In a country where nearly 30% people are below poverty line, their inclusion in the economy is hardly optional. If we do not act fast, it will lead to a vicious cycle of poverty, exploitation and injustice. The data illustrated above points towards fissures in our theory of inclusive growth. The picture is dramatically different in rural and remote areas as against the metros which have the privilege of keeping pace with the global mode of development and growth. India that is Bharat and which lives in villages still awaits its opportunity to join the mainstream of Indian financial systems and economic growth.

World Bank, for the first time, explored the issue of financial resilience in the 2014 Global Findex Survey. If people have a way of saving money and accessing the money as and when required, they can manage the risk and exigencies better. In order to understand how well prepared people are to meet unexpected expenses, the survey asked the respondents whether it would be possible for them to raise an emergency sum of 1/20 of gross national income (GNI) per capita in local currency- $2600 in the United States. It also tried to find out the what the main source of funds would be. Across the world, 76% of adults said that it would be feasible for them to access such an amount. Among these people, three-quarters said that either savings or family and friends would be their chief source. In the context of India, it is interesting to note the case of developing countries. In developing countries, 28% said savings would be their main source. However, 56% of those who said they would rely on savings do not save at a formal financial institution. This is a pointer to the fact that there are millions of people who do not have an access to financial systems.

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