This document discusses stakeholder engagement and financial inclusion. It notes that stakeholders include customers, who are important for a company's value and survival. Creating meaningful interactions between stakeholders allows for shared objectives and solutions. The document also discusses the importance of financial inclusion and access to a variety of financial services for low-income groups to help mitigate risks and vulnerabilities. Barriers to financial inclusion include lack of identity proof, remoteness, and financial illiteracy.

1. Dr R Ramakrishnan
ramakrish54@gmail.com
See my research articles at
www. ssrn.com/author=646193

2. A
stakeholder is anybody who has a
claim, stake or vested interest in the issue
at hand, or in an organization, or in his or
her relationship with a product, service or
brand.
 Customers
are one of most important type
of stakeholders. They hold the key to the
value in the company and in fact, the
company itself

3. 
They are interrelated.

Both need each other to advance
The interdependence of business and society implies
that both business decisions and social policies must
follow the practices of shared value exchange.

4. Creating meaningful interactions between
various stakeholders enable the identification
of shared objectives, design of solutions that
account for various perspectives, and creation
of representative program strategies required
to scale up important high-impact capacity
development strategies.

5.  CRM
 Influence
and social networks and
 Techniques for listing and
mapping stakeholders

6.  CRM
is a process or methodology used to
learn more about customers' needs and
behaviors in order to develop stronger
relationships with them. It helps
businesses use technology and human
resources to gain insight into the behavior
of customers and the value of those
customers.

7. 
Running a successful CRM project requires a high
degree of stakeholder management.
CSR oriented Financial Institutions (FI) will have robust
stakeholder engagement programs to solve complex
sustainability challenges, provide input into business
strategy, and keep abreast of stakeholder concerns.
 To have a better stakeholder management especially in
the rural areas which is the bottom of the pyramid, there
is a necessity for corporates to work towards financial
inclusion for the same technology and communication
are the prime moves.


8. •
•
•
•
•
•
•
Concern
Communicate
Contribute
Connect
Compound
Co-Create
Complete

9. Financial inclusion is characterized primarily as
either general access to loans (mostly
consumption or consumer loans rather than
livelihood loans) or access to savings accounts.
Very few risk management and vulnerability
reducing products are available to small holder
producers.
 Access to finance is primarily a bridging resource
for many low income groups.


10. 
Increased
vulnerability
and
reduction
in
livelihood security

Forced movement towards other types of
livelihoods

Entry into perpetual debt traps

At the extreme, in a few cases, bondage and/or
suicide.

11. 
According to Deputy Reserve Bank Governor Ms. Usha
Thorat(2007)[1] on an all India basis, only 59% of adult
population in the country has bank accounts which leave the
41% of the population as unbanked. In rural areas, the
coverage is 39% against 60% in urban areas.”

Thus a majority are excluded from the payments system,
which means not having access to a bank account and formal
credit markets, forcing them to approach informal and
exploitative financial markets
[1] Thorat, Usha, ‘Financial Inclusion – the Indian Experience’, HMT-DFID
Financial Inclusion Conference, London 19 June 2007

12. Culture,
Education
(Especially Financial
Literacy),
Gender,
Income and Assets,
Proof of Identity,
Remoteness of Residence etc.

13.  Microfinance
has enhanced their outreach
over the period 2001-2007 in India.
 This
growth is visible not just in terms of
the number of active borrowers but also
gross loan portfolio and total assets.

14. 
There is still a paucity of accurate data with regard to
the absolute number of clients and poor women served.

While institutions have done well in terms of extending
access to financial services to low income women
clients, the focus has largely been in terms of delivery of
credit

15. 
Low income clients everywhere have a range of evolving needs
as they are more vulnerable and face a large number of risks.
They need continued access to the wide range of financial
services to counter the vulnerabilities that they and their families
face in their daily struggle for survival.

Access to a wide range of risk mitigating financial services at
affordable cost is very critical especially as it enlarges livelihood
opportunities and empowers the poor to take charge of their lives

16. 
The SHG Bank Linkage Programme (SHGBLP) and its
variants These are supported by NABARD and Public Sector
Commercial Banks.

The SHG Bank Linkage Programme (SHGBLP) and its
variants These are supported by NABARD and Public Sector
Commercial Banks.

The
Partnership
Model
of
ICICI
and
other
private
commercial banks: Since banks face substantial priority sector
targets and microfinance is beginning to be recognized as a good
business opportunity for institutions, a variety of models have been
tested between banks and MFIs.

17.  In
rural areas customers cannot be expected
to come to branches in view of opportunity
cost and time and hence banks will have to
reach out through a variety of devices such
as weekly banking, mobile banking, satellite
offices, rural ATMs and use of Post offices.

18. 
Financial inclusion offers a huge potential for business
in terms of resources and assets and banks therefore
need to take aggressive steps to use technology,
business processes and personnel to be able to exploit
this potential in innovative and creative ways.

Use of technology is critical in building up a reliable
credit information system, build up data base on
customers for a variety of purposes, thereby reducing
the transaction cost involved in checking encumbrances
and collaterals and also facilitating better pricing of risk.

19.  Banks
should
focus
on
relatively
unbanked and under served areas rather
than
competing aggressively in already
well served areas. There is a clear need to
vastly increase the numbers served by
existing branches for savings loan and
remittances.

20. 
Financial inclusion should be led by understanding
the needs of the customer rather than achieving
targets. The focus for rural areas should be reach
out rather than the number.

Delivery of financial products must be preceded
by i improving financial literacy and credit
counseling. The focus should be on customizing
products for transactions, remittances, savings,
loans and insurance.

21. 
Last but not the least, the role of the State
Governments in facilitating financial inclusion is
critical.

Land settlement rights, computerization of land
records, and providing economic and social
infrastructure
with
pro-active
agricultural
extension machinery will greatly help in using
financial inclusion for sustainable development