Sundaram Ramaswamy
Sundaram Ramaswamy
Senior Consultant
Oct 03 2017

Inclusion in the digital era!

Inclusion in the digital era!

Financial knowledge/education essentially determines the way people access financial services. In India, as a matter of fact, the penetration of financial services in the rural areas is still dismal. A survey by Standard & Poor had found that India is home to 17.5% of the world’s population and nearly 76% of its adult population does not understand even the basic financial concepts.

While scores of policies and thousands of schemes have been conceptualised and implemented to create a more economically and socially inclusive society, a continued lack of awareness and financial literacy among rural population are primarily responsible for low penetration of financial services.

Most technology tools/platforms currently available are delivering financial literacy through traditional classroom based medium of delivery. This medium has its own limitations. Centre for Digital Financial Inclusion’s SAMWAD is a platform for intuitive and interactive communication, which can be leveraged for continuous literacy programmes.

SAMWAD is a low-cost solution, with the vision of anytime, anywhere access to enable fruitful continuous learning. At the core of SAMWAD are ‘SMS’ (Short Message Service), ‘IVR’ (Interactive Voice Response – Voice-based applications) and mobile applications that can be utilized as conduits in disseminating knowledge to mobile phone users with low literacy and low digital skills.

Hence, SAMWAD through its interactive channel hopes to educate the masses with the vision of a brighter digital India.

At a time, when the focus is on the achievement of sustainable development, governments across the States must attempt to include maximum number of participation from all the sections of the society.

The interventions and programmes unleashed by the Government, to achieve the goals are neither lacking in number nor intent. So why and what are we still struggling with? The answer is not simple.

The problem statement

Let us picture this! A young woman who has taken up a cleaning job in a suburban neighbourhood, approaches the nearest post office with a request to open a savings account, as she wants her employers to transfer her wages into that account.

Going by the rule book (as mandatory requirements), the post office would obviously ask the lady to submit a proof of identity and address as these are the pre-requisites to open an account with the Post Office. The ID proof could be an Electoral Photo Identity card, Aadhaar or the letter issued by the Unique Identification Authority of India (UIDAI), Ration Card with photograph, Passport, Driving License, Photo Identity Card issued by recognized, University/ Education Board/ /College/School, Identity card from Central/State Government or PSU.

While an address proof such as Bank or Post Office Passbook/Statement with current address Passport, Ration Card with current Address, Electricity Bill, Telephone Bill of not more than three months old, Salary Slip of reputed Employer with current address, Aadhaar or the letter issued by the Unique Identification Authority of India (UIDAI). The young lady has none of the above as she is new to the place.

The complexity of the process involved in securing a savings bank account, or establishing her identity, act as hurdles for the young lady who is desperately looking to open an account. In the same way, a daily wager who is constantly on a move as he does not have a permanent place of residence, is not looking to save any amount from his meagre salary. All he is concerned about is meeting immediate requirements without hitting the roadblocks of procedural requirements to create a savings account through formal channels.

Our assumption is – as is also the case with many of the excluded sections of the urban poor – that this young woman or the daily wager does not qualify to open a savings account, as they have nothing to sufficiently back their identity or residence address. These are classic cases of financial exclusion!

It may sound absurd to the readers, but the truth is that such examples can be called a case of “missed communication”. There are exceptional processes and methods to address the population of excluded citizens. There are products designed and offered to such people as the young woman or the daily wager referred above. More often than not the service providers do not possess the knowledge of special provisions designed to achieve inclusion, nor do the citizens!

How to approach the problem?

The Reserve Bank of India (RBI) on July 15, 2015 constituted a committee to work out a five-year (medium-term) action plan for financial inclusion. The 14-member panel is headed by RBI executive director Deepak Mohanty. While there will always remain broader issues to be studied, how do we identify our approach?

Every time a qualifying criteria is drawn a set of people get excluded, despite the intent being good. The success of methods and measures to include an excluded section into the main stream, will depend on how effective the communication is and the rate of absorption by the intended beneficiaries.

This is where an innovation like “SAMWAD” can come in as a saviour. The simple looking feature phone with the young woman could give her access to the knowledge repository informing her about what she is entitled to, and also the available options. And all this can be done through SAMWAD. Being a multichannel tool, SAMWAD can offer content transfer between three channels – SMS/APP/IVRS. It can also address diverse human behaviour and allows engagement and interaction with the user. The same tool can therefore be used to help the officer at the Post Office by providing him information, which he either was unaware of, or maybe failed to consider in the case of the young lady.

SAMWAD can be used for creating specific content for each context and can also be personalized to an individual user or at the group level. SAMWAD can collect feedback and also enable engagement on a daily basis with anytime, anywhere access. Since only a mobile phone is needed to use this tool, the reach of SAMWAD is also vast.

The two-way communication keeps the interest of the user intact, thereby maintaining continuity in the dialogue and information sharing in simple ways. To make financial literacy a priority for one and all, there is a pressing need for innovations that allow Governments to conduct continuous literacy programmes.

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