Financial Inclusion and Union Budget 2020
Financial inclusion is increasingly being recognized as a key driver of economic growth and poverty alleviation across the globe. Studies have found that access to formal finance can boost job creation, reduce vulnerability to economic shocks and increase investments in human capital. Seven of the United Nations Sustainable Development Goals (SDG) of 2030 view financial inclusion as a key enabler for achieving sustainable development worldwide. Union Budget 2020 and Enabling Financial Inclusion While presenting Union Budget 2020, Hon’ble Finance minister Mrs. Nirmala Sitharaman said Technological tools like Artificial Intelligence, Internet of Things, 3D printing, drones, data storage, Quantum Computing are helping change the way the country functions, these emerging technologies need to be focussed to drive financial inclusion in the country.” How Artificial Intelligence Can boost Digital Financial Inclusion? Most of the rural population looks for a “credit” facility with a financial institution but in the absence of “credit score or history” the loans are not granted or provided at a very high-interest rate. AI can be used to build a rural credit score for individuals based on their crop turnover, business profit or sales. Data collected from SMS logs, contact details could assist in identifying the user who can be trusted in repaying the loan. Based on this a score could be assigned to him and FI can impart credit for individual’s needs. How the Internet of Things Can boost Digital Financial Inclusion? Internet of Things [IoT] of wearable technologies bridges the gap and open access to formal finance to rural/immigrants of a country. A live example has been seen in Africa where people struggle to get a continuous supply of electricity. Hence Solar powered chargers and lanterns evolved, but they cost a lot and with people having limited income, putting a lump sum amount at the start is difficult. Hence they came up with Pay-as-you-go model that connects the solar-powered device to their SIM card for remote management and integration to payment network offering customers to pay installments easily and ability to service providers to manage device remotely in case of issues. How Drones Can boost Digital Financial Inclusion? Last-mile delivery in rural and remote areas is still a struggle and startups, brands are looking for a feasible solution. Drones could offer assistance here. While delivering cash to the last mile may have its risk, but delivering couriers [containing clothes, books, grains, etc] with a digital-based interface that enables payment could assist in social inclusion. Drones could also aid to insurtech in investigating, inspecting the home/vehicle/shop under an insurance claim and send the report for faster processing. This would help in getting rural people under insurance assuring a good quality of life. How Quantum Computing Can boost Digital Financial Inclusion? Quantum Computing may not directly impact the unbanked individuals, but it can help Investors in evaluating the business cases for Banks and FI with the innovative products In Localizing banking to regional flavor with the use of data Supply Chain in scanning and quickly coming up with the best route to meet the logistics timelines. Our Hon’ble Finance Minister not just made sure to include these emerging technologies growth plans in the budget but she confirmed that all the public institutions at a Gram Panchayat levels will be given digital connectivity, and Fibre-to-home through BharatNet will link 100,000 Gram Panchayats in the financial year 2020-21 itself. Sitharaman said, “Anganwadi centers, health and wellness centers, post offices, police stations, and other rural welfare centers to get 100 percent digital access. The government’s vision is that all public institutions be provided with digital connectivity.” For last four years Teknospire, a technology provider to Banks and NBFC’s is doing its bit in enabling Financial and Social Inclusion. If you are looking for a Digital Banking, API Banking or Mobile Wallet solution, we are just a call away. References RBI, Finextra, Nextbillion, finovate, bobsguide