Leveraging Technology for Financial Inclusion

Aditi Dayal

As nearly 112 million households have no access to formal credit, financial inclusion (FI) remains a key policy concern in India. There are a multitude of challanges for including remote and poor populations most prevalent of which are; limited human resources and high transaction costs.

The Punjab National Bank’s ICT for Financial Inclusion programme aims to undercut these challenges and make banking services reach the poorest most excluded populations in India. The bank also wanted to prove that  this can be a profitable business model despite the perceived high costs involved. The PNB designed and implemented technologies that included a hand held device and smart cards for lowering entry barriers for customers and ensured a number of safeguards to misimise the instances of fraud.

The programme currently includes 39 ICT based FI projects in 14 states of the country, covering about 5400 villages. The scheme has already been proven with national level recognition for the model in the form of prestigious awards. Programme managers believe it has potential to expand financial services to remote parts of the country and, at the same time, keep the transactions cost very low for the bank. The introduction of ICT tools has significantly reduced the manpower, infrastructure and manual paper work required. Processes are streamlined and can be up-scaled to include far more number of customers than it does now. It also has the capability to be linked with national level social security schemes like the Public Distribution System, MGNREGS and Unique Identification (UID) to facilitate payments of wages and other benefits.

Year of publication: 
Other collections
Themes and sectors: 
Financial services
Themes and sectors: 
Information and communications technology
Case story length: 
15 pages

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