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A Road Map

Nidhi Choudhari

By Sameer Kochhar
Academic Foundation, New Delhi, 2009, pp. 168, price not stated.


Speeding Financial Inclusion by Sameer Kochhar is based on the first ever nationwide multi-stakeholder study entitled ‘National Study on Speeding Financial Inclusion’ which was undertaken by the Skoch Development Foundation. Apart from giving recommendations in the form of a roadmap to speed up the process of financial inclusion, the study has also sought to determine the viability and cost-effectiveness of the Business Correspondent (BC) model and has identified several options to make the model viable.   The author has defined financial inclusion as ‘not only providing accessibility of the entire range of financial products and services, it must also be appropriate, fair and transparent’ (p. 19). He writes, ‘Financial inclusion offers incremental and complementary solutions to tackle poverty, to promote inclusive development and to address the MDGs.’ ‘Setting the Stage for Financial Inclusion’ throws light on the efforts and preparedness of India’s banking sector for extending financial services to the unbanked population of the country. He writes, ‘It involves the all-important process of ensuring access to a range of financial services such as bank accounts, credit, remittances and payments, insurance facilities and financial advisory services, at an affordable cost to the economically vulnerable groups. The banking sector in India has recognized this imperative and has undergone fundamental changes in the last two decades.’   ‘What is the Cost of Financial Access’ throws light on the financial viability aspect of financial inclusion drive. According to this study, the viability gap in extending financial inclusion for full coverage of 111.55 million households would be Rs.8193.35 million. This gap would be reduced by one third if the transaction fee is paid by the consumers. The study says that the Rs.10000 crore given for Financial Inclusion Promotion and Development Fund (FIPF) and Financial Inclusion Technology Fund (FITF) is adequate to meet the funding gap.   In ‘Converting Financial Access to Financial Inclusion’ Kochhar focuses on linking of self-help groups, micro finance institutions, Panchayati Raj Institutions, post-offices and other such institutions which have a presence in rural areas with that of formal financial structure of banking, insurance and pension services. The author also emphasizes the need for financial literacy as critical for sustaining financial inclusion and to revisit the aims of financial inclusion so as to ensure reduction of financial disparity and equal distribution of fruits of growth. Financial inclusion should see that the benefits of growth reach a larger number of people, adding to the strength of the ...

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