Reaching the underserved through technology

1. S. Nazima Kausar, Associate Professor
Bheemi Reddy Institute of Management
Science,Adoni.
ACADEMIC WRITING
APPLICATION NO:
98b59133ee4e11e9a0808b08b80fda9e
REACHING THE UNDERSERVED
THROUGH TECHNOLOGY
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2. Financial inclusion is delivery of financial services at an
affordable cost to the vast sections of low income group. In
this era technology is driving the business growth and
improving performance. In India every sector is leveraging
technology to grow in the industry. In our research study it is
found that technology is an essential tool for MFIs in reaching
underserved in remote areas and helps in lowering operational
costs ,increases efficient use of resources and cost effective.
ABSTRACT
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3. The objectives of this paper are:
 How technology will help the institutions in reaching the
underserved.
 What are the different services offered through technology
 Challenges faced by MFIs in adopting and integrating
technology to provide financial services to low income group.
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4.  In India only 40 percent of the population possess bank
accounts, 10 percent of people having life insurance cover and
13 percent of people have debit cards.
 These points reveal that India's population deprived from the
basic banking services. In developing country like India
growing population with limited access to financial services is
a major concern for promoting financial inclusion.
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5. Country Population Excluded (in
millions)
China 263
Africa 230
Rest of Asia 162
India 135
Latin America(Exluding
Brazil)
28
Brazil 14
Middle East 20
East Europe 19
West Europe 18
Table Showing the excluded population.
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6.  The usage of existing mobile communications will bring down
the cost and increases the operational efficiency.
 The banks should invest in technology and R & D (Research
& Development) in developing low cost banking facilities for
the rural and semi urban, which brings the excluded people
into included.
 In India most of the unbanked poor have informal access to
finance many of them are poor but own a mobile phone.
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7.  Services like digital transfers, remittances, mobile phone
payment, insurance, savings and investment, borrowing and
financial planning adoption increased.
 In rural areas mobile money has been successful due to the
infrastructure provided by the telecommunications sector in
India.
 Few micro finance institutions are providing cloud based
services and software as service to reach the underserved
population.
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8. Why technology?
 Drastic drop in paperwork.
 Reducing operational cost.
 Accurate information of the customers with the service
providers.
 Easy to track accounts.
 Improving the workflow efficiency.
 Low interest rates as operating costs will be low.
 Mobilisation of savings.
 Real time transactions.
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9. Technology benefits to customers:
 Making purchases at any store
 Transfer of funds.
 Reduces the visit to services providers.
 Anytime anywhere payment.
 Payment of utility bills.
 Enquiry based services on account and card balances.
 Services based on request.
 Secure payments.
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10. Challenges faced by financial service
providers in adopting technology:
 The service providers are not concentrating in developing a
technology
 Limited capacity to absorb technology.
 Strong network of communications and internet connectivity is a
challenge
 Education and awareness is must because illiterates don't trust the
technology.
 Most of the service providers are unable to attract IT staff
 Some of the IT companies, technology service providers are treating
the MFIs as testing grounds
 As there is no one common technology platform MFIs have their
own customized software requirements.
 Legal and regulatory constraints are there in some countries.
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11. Technology initiatives in promoting
financial inclusion
 Financial Information Network & Operations (FINO) a technology
solutions company promoted by ICICI bank is among the first in
India to provide innovative technology solutions to enable financial
providers to reach millions of underserved people.
 Zero-M.A.S.S Foundation in Karnataka launched a new generation
biometric finger print based solution which offers end to end
payments with small value by leveraging new generation mobile
 Integra a technology service provider partnered with 15 commercial
banks like canara bank, vijaya bank etc., offers iMFAST(Integra
Mobile Financial Applications Secure Terminal) a portable teller
machine to perform simple banking functions in rural areas.
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12.  Bangalore based Grameen Financial Services(GFS) partnered
with m-check(Technology provider) in launching the m-
banking with 100 customers as a pilot project. By
incorporating technology GFS served more than 3,30,000 rural
customers within two years after launching a pilot project.
 SBI Conducted pilot project and developed a banking kit
called ‘bank in a box' consists of cellphone , finger print reader
and printer to open no frills account
 HDFC bank launched 'bank on wheels' for low income market
and unbanked poor to provide access to financial services at
affordable cost by using biometric ATMs.
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13. Conclusion:
 The appropriate use of technology will help the service
providers in reducing the operating costs.
 Developing low cost banking facilities to the rural and semi
urban people will bring the excluded people into included. RBI
has to liberalise some of the legal requirements so that other
than banks, other institutions which have physical presence in
remote areas may accept the deposits.
References:
McKinsey & Company 2008, Neal Geach (2007), Rao C. V. (2003)
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14. ACKNOWLEDGEMENT: ACADEMIC WRITING
SOURCE:
Amrit Patel (2010), “ Potential for mobile banking for rural India”, The Indian
Banker, Vol V No.10, October 2010.
Dewang Neralla (2011), “ Breaking new frontiers”, Microfinance World,
Financial Express, Jan-March 2011.
Rangarajan (2011), “ Use tech to achieve financial inclusion”, Business
Standard, November 29, 2011.
Srinivasan, N.(2009), “ Microfinance India – State of the sector report 2009”,
Chapter 8, Sage publications, ISBN: 978-81-321-0298-4.
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