India’s Unbanked Poor

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Lack of access to financial intuitions and services is not an India specific problem, but aRavi Gupta global one. It has been estimated that almost 2.5 billion people in the world, or approximately half of the global population, does not use any kind of banking services. Of these unserved people, approximately 2.2 billion reside in Asia, Africa, Middle East and Latin America.
In India’s policy circles, the importance of an inclusive financial system is now being widely recognised. Financial inclusion has become a policy priority in the country. The Finance Ministry and the RBI have during the last decade come up with many policies for providing people from marginalised sections of society with a safe, affordable means of entering the financial net.
There has been a good increase in the number of bank branches. In 1969 the country had only 8000 bank branches, and today we have more than 89,000. There has also been a significant improvement in the number and scope of the insurance and microfinance institutions that are engaged in serving the poor. The banking and insurance sectors are key Mission Mode Projects  under NeGP (National e-Governance Plan).
However, despite the policy initiatives and efforts of non-governmental institutions, significant proportion of the nation, primarily those who dwell in rural areas, continue to be outside the coverage of the formal banking system. RBI’s own reports suggest that almost 40 percent of Indians lack access to even the most basic kind of financial services.
In this issue of eGov we have made an in depth exploration of the role that government entities and also the private players are playing in the financial inclusion space. Factors like lack of regular income, poverty, illiteracy and also the lack of reach are some of the major obstacles in financial inclusion. Solutions from ICT are being used in a big way to provide financial services to the poor, but in this lack of proper infrastructure for connectivity often plays spoilsport.
Many of the stakeholders in the financial space that we have interacted with are of the opinion that financial inclusion does not have to be an obligation. By making use of low cost solutions from ICT to lower the cost of transactions, it can be profitable to the players who are providing these services. The range opinions that we have collected in our special feature on financial inclusion shatter many old beliefs and lead us to some interesting ideas on the subject.
We hope you will find the feature informative and entertaining.
The issue also has coverage of the eWorld Forum, 2012, that took place at the Le Méridien Hotel, New Delhi, on 15th and 16th June, 2012. The event was highly successful and it served as a venue for a vibrant discussion on e-Governance. Now we look forward to the  World Education Summit, which is scheduled for 23 and 24 July, 2012. We hope that you  will be there to interact with the leading stakeholders from the global education community.

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