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India: When it comes to accessing last mile access, the focus should be on the ecosystem at work what model has to be adopted for financial inclusion, said Ms Chanda Kochhar, Chairperson, CII National Committee on Banking and Managing Director & CEO ICICI Bank Limited, in her address on the theme ‘’ Getting last mile access at a controlled level of risk’ at the First Financial Inclusion Summit organised by Confederation of Indian Industry (CII) in New Delhi.

Speaking on the four major risks posed to financial inclusion, Ms Kochhar said that it is important to identify and develop a large pool of business correspondents for the financial inclusion to be effective. She added that the operational model of the business correspondents is also key to the success and its viability in terms of income generation.“Access to finance depends on the saving habits of people and a sound credit history can be developed on the back of financial literacy,” Ms Kochhar said.

Citing example from his experience on working with rural investors, Mr UK Sinha, Chairman, CII National Committee on Mutual Funds and Chairman and Managing Director UTI Asset Management Company Limited, said that rural investors want to take informed decisions when it comes to investing money.“To understand the effectiveness of our model, we spent 3-4 days with Seva Bank employees before introducing our pension scheme.They asked us the same questions as a mutual fund investor would have asked,” he said.

Mr Sinha added that presently 2 lakh people are covered under the old age pension scheme of his company in Tamil Nadu and Andhra Pradesh alone and its success is the result of the company’s idea of playing the role of an “aggregator”.

On the government role, Mr Sinha said the government should play the role of a facilitator rather than a license provider.“We need to allow local innovation for financial inclusion to succeed and telecom sector’s success in doing so can be the case in point,” he said.

Telecom sectors’ views were echoed by Mr Sanjay Kapoor, Chairman, CII National Committee on Telecom and Broaband and CEO of Bharti Airtel Limited (India and South Asia). He said the financial inclusion can be achieved only if all the parts of the ecosystem come together. “People want more transactional activities and not bank accounts. This can happen only on incremental cost. With 90% coverage in the country, and successfully completing transactions worth Rs 6 billion in a year, the telecom industry has the ability to do it at low cost.”

Later, answering to a question from audience, he suggested that telecom sector can work at the front end while at backend banks must prevail to create a successful model for financial inclusion.

Mr N Sivaraman, Director (finance services), Larsen and Toubro Finance, said that people’s preference of cash over digital transaction is not happening in the country as required. Pointing towards risks, he said that it is difficult to monitor no dues and trust is the only factor that works between people and business correspondent. “We can find services around means of livelihood of people and make them profitable to help them generate extra income. We can look at their siblings and find ways to enhance their skills through local level training programmes,” Mr Sivaraman suggested.

Mr Vijay Mahajan, Founder and Chairman Basix Group, said that risks with respect to service provider, people or system need to be clearly identified. He said that India needs revolution for the financial inclusion to be a success. “We are roughly at the same stage as we were in 1985 when telecom revolution took off.” He also briefly discussed the risks of authentication, authorisation and acknowledgement.

Source:http://www.cii.in/NewsRoom.aspx?enc=SO0wa+TYDvk3FXKFO1bn1Q==