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Financial Inclusion And The Way Forward

IndianMoney.com Research Team | Updated On Wednesday, September 26,2018, 04:54 PM

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Financial Inclusion And The Way Forward

 

 

You love your nation. You want to see it progress and grow. For the growth and progress of the nation, you need a very essential ingredient….Financial Inclusion.

So what is financial inclusion?

Financial inclusion seems a word too difficult to understand. It is actually simple. Financial services such as banking and insurance, reaching citizens in every nook and corner of the nation, is called financial inclusion.

Yes…The Government too realizes the need of financial inclusion, in the progress of the nation. The Prime Minister of India, Narendra Modi, launched the PMJDY (Pradhan Mantri Jan Dhan Yojana) on August 28th 2014. You can open a savings bank account at designated branches of a number of public and private sector banks, which are part of the PMJDY scheme. This scheme was a super hit with a number of citizens in rural areas, opening saving bank accounts under PMJDY scheme. The number of citizens who have opened savings bank accounts under the PMJDY scheme, is over 20 crores as of February 2016.

The year of financial services in India

This honor goes to the year 2015. PMJDY scheme really took off in the year 2015. Then the Jan Suraksha Yojana. The Prime Minister of India launched the Pradhan Mantri Jeevan Jyoti Bima Yojana on May 9th 2015. This is a life insurance plan which covers death due to natural causes or accidents. You have to pay a premium of INR 330 a year. (This is just a rupee a day). The Prime Minister of India also launched the Pradhan Mantri Suraksha Bima Yojana on the same day (May 9th 2015). This policy covers you for death or disabilities you suffer in an accident or injuries caused by accidents. The premium is ridiculously low and a mere INR 12 a year. This is just 1 rupee a month.

SEE ALSO: Why Should You Avail A Home Loan?

So What Next After Financial Inclusion?

Yes…Financial inclusion did great in India….But it has to take the next step. Let us understand this with an example… Latha like many of our fellow citizens, stays in a slum in an urban area. She is what is known as the urban poor. Latha recently opened a savings bank account under the PMJDY, where she deposited a couple of thousand rupees. The bank gave her a debit card called the RuPay card. There were also a number of ATM’s near the slum were she could make a withdrawal. But here’s a surprise….Latha in spite of having a PMJDY account and a RuPay debit card never went to an ATM. Wonder Why? She believed only rich citizens in expensive cars withdrew money from ATM’s. She also believed that the guard at the ATM would humiliate and throw her out of the ATM, if she dare step into the ATM. Latha is not alone….A number of women called the urban poor have the same fear. So what use is financial inclusion if it cannot be implemented? Is there a way out of this problem?

A highly popular financial services firm came up with a unique solution. What if Latha is shown an animated video to make her understand how an ATM works? This is done as soon as Latha gets her RuPay card. Latha and several other urban poor women are then allowed to ask questions and clarify any doubts they have. All Latha’s fears of using an ATM have now disappeared. She confidently steps into any ATM near her home.

Financial Inclusion- The Practical Approach

What if financial education could be imparted through board games, say snakes and ladders? Ladder is something good (say a good financial decision you make). Snake is something bad. (Say a fatal accident, a medical emergency or being cheated by a moneylender). A ladder helps you improve your finances and a snake bring you to financial ruin. You are rewarded for your good financial decisions and punished for your bad financial decisions. This is also a good time for you to interact with a number of fellow citizens (a social occasion) and gain financial knowledge.

Yes…There is nothing like financial education imparted through videos and short animated films. Better still if this can be done in the local language. This is the next step of financial inclusion.

 

 

 

 

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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