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Financial Inclusion : The Task

Financial Inclusion : The Task. Krishan Jindal. Financial Inclusion - Definition. Delivery of financial services at an affordable cost to vast sections of disadvantaged and low income groups. Financial Services includes . Savings Credit Insurance Remittance facilities etc.

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Financial Inclusion : The Task

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  1. Financial Inclusion : The Task Krishan Jindal

  2. Financial Inclusion - Definition • Delivery of financial services at an affordable cost to vast sections of disadvantaged and low income groups

  3. Financial Services includes • Savings • Credit • Insurance • Remittance facilities etc.

  4. NSO Survey (2003) on indebtedness of farmers • 27% farm household only have access to formal credit sources. • Only 4% in NE Region have access to formal sources. • Only 20% in NE Region borrow both from formal and informal sources (Tripura State – 49%) • More exclusion among marginal farmers and tribal families.

  5. Demand Deposit Bank Accounts • 41% population do not have a Demand Deposit Bank account • 61% unbanked in rural areas • 63% unbanked in NE Region (62% in Tripura State)

  6. Number of Loan Accounts • 14% of adult population has loan accounts • 9.5% in rural areas • 7% in NE Region

  7. Why Financial Inclusion ? • High transactions costs of borrowers • High transactions costs of savers • High transactions costs of banks • High risk cost • Inappropriate products

  8. Who are excluded ? • Marginal Farmers • Landless Farmers • Oral Lessees • Self Employed • Urban slum developers • Migrants • Minorities • Social excluded groups • Senior citizens • Women

  9. Measures for promoting financial inclusion • Products • No frill account • KYC norms simplified • Introduction of GCC • OTS for overdue loans upto Rs.25,000/- • KCC

  10. Measures for promoting financial inclusion • Use of intermediaries • Linkage of SHGs with bank • 29 lakh SHGs credit linked • 42 million families covered • Linkage of MFIs with banks • Business facilitators and correspondence model.

  11. Measures for promoting financial inclusion • Others • IT solution for financial inclusion • Credit counseling and financial education • Revamping of RRBs and cooperative banks

  12. Funds for Financial Inclusion • Micro Finance Development and Equity Fund • Financial Inclusion Fund for Development and Promotional Interventions • Financial Inclusion Technology Fund to meet cost of technology

  13. Financial Inclusion : Challenges • Holistic approach • Viability • Scalability • Adoption of technology • Use of intermediate agencies.

  14. Thank you

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