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Leveraging ICT for social inclusion

Dr. Nachiket Mor

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Banking in remote rural India

• Rural customers have different financial needs– Low value – Frequent transactions

• Need to customise current model to take care of: – Several proximate touch points– Unreliable connectivity at last mile– Investment in local human resource– High monitoring for some portfolios

• Unique transactional environment– Local language interface for customers– No systematic way to record credit history– Challenge to provide KYC documents

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Financial Planning – Life Wealth Envelope

• Developed as a training tool and draws parallels from a flight simulator

• Simulates 100 possible wealth paths of a household and picks the best and the worst possible pathways

• Attempt is to push the lower-bound line upwards using financial products

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Life Wealth Envelope (LIWE)

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Pilot landing on Hudson saving lives

•Setting the context right

•Training/simulations prepare you for real life challenges infact save lives

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Low Income Wealth Envelope

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Kshetriya Gramin Financial Services

• To provide financial services to underserved rural areas

• Financial services offered are:– Loans– Insurance– Money market mutual fund– Remittances

• Each KGFS to operate in two districts or cover 5 mn population

• Ownership for maximising the financial wellbeing of the clients

• Thin level branch at village level• Strong back office with technology

infrastructure

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Key applications of technology

• Customer unique identification– To record credit history– Enables dedupe process

• Profiling and continuous updation of customer household data– To build scoring models– To develop new products– To understand the impact of usage

• Equip frontline staff to do financial planning• Enhance collateral management• Building systems to scale

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Customer Unique Identification

• Capturing Fingerprint Biometric for authentication

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Profiling and continuous updation of data

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Enhance collateral management

• Using RFIDs to identify cattle for Insurance

• Cattle health details capturing through Veterinary application

• Reduction in premium on account of reduced moral hazard

• Technology to track the movement of collateral like Trucks / LCVs

• Reduction in LGDs through enhanced monitoring

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Building systems to scale

• Flexcube- core banking system

• Cost effective ASP Model

• Secured and state of the art data center

• Multiple fallback/ DR site

• Access over internet/intranet

• Customer Management System

• Offline/online mode of operation

• Modular approach to add product functionality

• Multiple entities support

• Access over internet

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Areas for partnership

• Optimal way of using biometric to identify customers

• Low cost computing and data entry devices

• Connectivity in remote rural areas/ mountainous region

• Low cost structures for cash management services

• Mobile phones as an interface for financial services

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Thank You