"Ten years ago, my job was to start from scratch and

move the agenda of private sector involvement in serving the world's poor," he said. "Now I want to start from the other end, the idea of democratizing commerce

"Ten years ago, my job was to start from scratch and

move the agenda of private sector involvement in serving the world's poor," he said. "Now I want to start from the other end, the idea of democratizing commerce

C K Prahalad
Fortune does lie at the bottom of the pyramid, financial inclusion has to be seen, not patronisingly but as a survival strategy for banks.

Financial Inclusion ? ?
Avg. No. of villages served per bank branch 4

Is the distribution equitable ? ?

90% villages dont have a bank branch within 5 km radius

51.4% of 89.3 million farmer households are excluded

from both formal/ informal sources

Only 27% of the total farmer households, access formal

sources of credit
Source: http://mospi.nic.in/mospi_nsso_rept_pubn.htm

Untapped
Marked by low financial literacy

Rich

Predominantly in rural areas but also in semi-urban

Mostly not reached by formal banking system

Narrow product suite leading to lack of integration Same channels attempt to cater to all customer segments

Middle

Poor

Financial inclusion services (payments)

EKO

FINO

A little world (ALW)

 Started in 2006, in Mumbai Has 40.41 million customer base & Force of 21,527 Transaction points in 397 districts across 24 states.

FINO is the market leader in delivering products and

services to first and last mile.

Customer service centers

Source :http://fino.co.in/

Accounting and MIS systems Point of

Banking

transaction terminals

Govt
Retail Insurance Technology

Bio metric smart

cards Rural untapped customers

Investors

Customers
22 banks 10 MFI 4 insurance companies

12 Govt entities
40.41 million micro customers

Product/Service : Banking
Deposits SHG loans JLG loans Recurring deposits

Branchless banking

Domestic remittance

Products / services
Government MNREGA Social security pension schemes Retail Third party service Micro insurance Insurance Rashtriya Swasthya Bima Yojna Technology Hosted solutions International sales

Pricing
Cost of operations cost of margins

Three models of pricing

1. FINO fintech

2. Sale of bio-metric cards/ micro deposit machines .

3. Micro-finance system.

Price
FINO fintech
No of enrollments of customers to clients Bulk remittances of amount into bank

Sales
Sale of Biometric smart

cards & deposit

machines Operational cost on disbursement of NREGA funds

Micro finance
FINO grown in to self sustainable model Started giving loans to MFIS & SHG

Evolving 3-4 financial models to lend to

MFIS AND SHGS
RS . 20 / remittance up to 10,000 @ single transaction for Micro customers

Place
Branch less banking Door to door service Rural micro customers Point of terminal Paper less insurance

Promotion
Rural customers Link with Govt bodies Clients Low transaction cost

1. Panchayat body
2. Project officer(NREGA) 3. FINO officers Financial literacy No frills savings account

Rs.50 @ Bank / Rs.16@ ATM

/ Rs.4 @BC Use of Hi technology and security Regulatory issues

Nukad natak- role play

In Panchayat

NUKAD NATAK

People
Business Correspondents employees Clients - Institutions
Micro Customers - 3rd party / Rural untapped
customers / Bottom of pyramid

Process
Identify & Approach to customer (mostly untapped) Bandhus / BCs Fills Accounting form for any clients bank Issue of smart card (photograph & finger print) Agents door step service Transactions

Process ..
Data recorded cross checked @ Dist. HQ Data stored to computer Send to Banks Database / Core Banking System

Insurance

Physical evidence
Mobile point of sales machines Micro deposit machines Smart cards Issue of receipts after transactions

Mobile phone, web cam, system.

Bandhus uniform

Bio metric smart card

Transaction

Mismatch b/w demand and supply

Customer needs
oFinancial Services for household
needs

Institutional response
oOccupation specific credit

oStructure around uneven cashflows oNo Documentation

oStructured Cash-flows : Regulatory

Compliance oComplete Paperwork as per product / compliance

oTimings as per occupation; bank at oBranch timings home

Blue Print

CUSTOMER Mobile phones, Biometric machine Contact person

Blue Print
Line of interaction Issue of smart cards

BC

Fill form Thumb impress Snap Invisible actions

Line of Visibility
SCRUTINIZE FORMS

Lo In

Physical BANK CBS

Lo In
IT FINO CBS DATA BASE

CUSTOMER

W
BC

Mobile phones, Biometric machine Contact person Insert S Card Thumb impress Invisible actions

D E SMART CARD Issue of receipts P Line of interaction O S I Collection of money T Line of Visibility S
Collection of money from all BCs

F
BANK CBS

Lo In

Physical BANK

Lo In
IT FINO CBS DATA BASE

Fail points
Thumb impression Age factor / Soiled Hands Embezzlement / fraud by BC Waiting time of rural customers to transact with BCS Low cash limits of BCs High cost of Bio metric cards Red tape by Govt bodies in releasing funds

Thumb impression / voice

Characters
Ease of use Error incidence

Thumb impression
High Dryness / dirt / age

Voice
High Noise / colds

Accuracy
User acceptance Long term stability

High
Medium High

High
High Medium

Source : A practical guide to bio metric security technology

High Penetration Mobile phone & 95% accuracy moving to voice based transactions

Quality dimensions Reliability

BC S meeting
Responsiveness
BC S trained to assist

customers rendering
required service

micro customers
Fill up forms Visits 3 times a day of

Highly Secured MIS.

each village by walk

Assurance
UID Smart card Using Bio metric thumb impression machine Secured usage of technology

Empathy
No cherry picking of end users No charge from end users

Tangibles
Issue of receipts Bio metric cards