New Delhi: The mobile phone will be a key tool in pushing the goal of financial inclusion in India, participants at an India Economic Summit discussion said on Monday.
Financial inclusion is one of the priorities of the United Progressive Alliance government. According to the 2008 report of a government committee on financial inclusion, only 27% of farm households have access to formal credit.
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Some of the participants in the panel discussion felt financial inclusion has a multiplier impact on the lives of people drawn into the formal financial system. “Financial inclusion leads to social inclusion,” said Manoj Kohli, chief executive officer and joint managing director, Bharti Airtel Ltd.
Bharti Airtel, a telecom company with 115 million customers, expects to play a key role in financial inclusion, going forward.
Taking initiative: Bharti Airtel’s chief executive Manoj Kohli. Rajkumar / Mint
Sultan Ali Allana, chairman of Pakistan’s Habib Bank, brought a banker’s perspective to the importance of mobile telephony in bringing about financial inclusion, and said in the developing world mobile phone penetration was higher than banking penetration.
Kohli explained that the logic of having to keep costs down to make access viable would ensure telecom companies are at the heart of financial inclusion. The mobile handset would be the medium through which transactions could take place as they significantly lower transaction costs, he said.
Sachin Pilot, minister of state for communications and information technology, agreed that the telecom industry was likely to play an important part in bringing about financial inclusion, but added that existing state-owned infrastructure could also facilitate the goal. For example, the 150,000 post offices in India could play a key role, he said.
Participants were unanimous that financial inclusion could not be brought about by a single entity such as the government. It would have to be a collaborative effort.
Kamal Quadir, founder of Bangladesh’s Cell Bazaar, made the case that entrepreneurs would play a crucial role in making financial inclusion viable, especially in the last mile. They were most likely to be the ones to come up with financially viable solutions to complete the circle of inclusion, he said.