India is one of the biggest unbanked countries in the world. Lack of a permanent address and other collateral keeps millions away from the banking and credit sector, which could
India is one of the biggest unbanked countries in the world. Lack of a permanent address and other collateral keeps millions away from the banking and credit sector, which could otherwise improve their lives by a huge margin. In order to facilitate this financial inclusion, Grameen Solutions (the Microfinance powerhouse founded by Dr. Muhammad Yunus of Bangladesh) and Obopay (the service provider for payments via mobile phones) have come together to form the Grameen-Obopay Bank A Billion initiative. This will provide access to financial services like cross-border remittances, money transfers, payments, and saving and credit accounts through the omnipresent mobile platform.
Priya Kekre reports in CIOL:
One of the biggest challenges the world faces today is financial inclusion or what one may call banking the unbanked sectors. There are many research and economic studies that state that when a critical mass of people or consumers are brought into the banking sector it has a multiplier effect on the countrys GDP, leading to economic growth. It is estimated that the banking sector itself grows by 10x while the countrys economic embassy undergoes a revamp. If millions of people are included into the banked sector, they get access to credit, savings, financial services, and remittances, which automatically increases their purchasing and investment power, says Vijay Balakrishnan, CMO, Obopay. Hence, many developing nations are looking at financial inclusion as an economic and strategic objective.
The thrust is on the inclusion of the poorest sections of society who cannot afford banking and financial services nor have the credit-worthiness to be eligible for these services, but have basic earning capacity. The mobile phone having become an easily available commodity all over the country, providing such solutions on this platform becomes the best way forward. The concept of ‘mobile micro credit’ is here to stay, and hopefully will reach and uplift a billion of the poorest in India and rest of the world.
Read the complete article here.
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