Less than 10% of India gets a salary. Yet most financial products on offer operate on a monthly schedule
Two kinds of Indians don’t go to banks. The first are those fortunate enough to be reading an English newspaper. The second are those whom banks can’t afford to serve—people like your security guard, vegetable-seller, delivery boy. They are visible to us, but not to institutions that have the power to change their lives. They must face the biting reality of having to borrow from a moneylender at punishing interest rates—to pay for a medical emergency or because a chit-fund’s foreman grabbed their savings. The tragic aspect of this reality is that these challenges could be addressed by well-designed financial products. Yet, formal financial services are vastly under-penetrated—India’s household debt to GDP ratio is 11% (the global average is 60%). This isn’t because Bharat does not borrow; they borrow from the wrong lenders.