Financial Inclusion (FI) is the delivery of banking services at affordable costs to the vast sections of disadvantaged and low-income groups.

The Indian economy is growing at a steady rate of 8.5 % to 9% in the last five years or so. The rural sector is one of the key stakeholders to the overall economic development of the country through its agricultural and non-agricultural sub-sectors. Agriculture alone employs more than 60 percent of the total workforce but still vast disparities can be noticed in the rural and urban financial conditions. This sector for long has been neglected their right to financial independence which could have been possible only if they had access to the financial services enjoyed by the urban population.

Limited access to affordable financial services such as savings, loan, remittance and insurance services by the vast majority of the population in the rural areas and unorganized sector is believed to be acting as a constraint to the growth impetus in these sectors.

Hon’ble Finance Minister, Shri P. Chidambaram, in his Union Budget 2008-09 re-emphasized on the importance of ‘Financial Inclusion’. Besides, giving an indication on how this concept can be taken forward, he also said that banks will be encouraged to embrace the concept of Total Financial Inclusion. Moreover, the Government will request all scheduled and commercial banks to follow the example set by some public sector banks and meet the entire credit requirements of SHG members, namely, a) income generation activities b) social needs like housing, education, marriage etc. and c) debt swapping.

Financial Inclusion imparts formal identity, provides access to the payments system and to savings safety net like deposit insurance. Hence, Financial Inclusion is considered to be critical for achieving inclusive growth; which itself is required for ensuring sustainable overall growth in the country.

According to Frost & Sullivan “On one hand, there are 234 million mobile users today – the CAGR since 2001 is 87.9 %. While each mobile phone is an indicator of connectivity, it can be presumed to be an enabler of Financial Inclusion. Since the number of mobile phones currently is more than the number of borrowers from the banking system, it is envisaged that a convergent technologies involving Information Technology and Telecom would be the most efficient vehicle for achieving Financial Inclusion.

Since India is a vast nation, many such technologies or their combination would be needed to be deployed to service the unbanked efficiently and achieve the objective of Financial Inclusion. Frost & Sullivan firmly believes that IT enabled Financial Inclusion is a great “Idea whose time has come”.

Frost & Sullivan’s “Charting a Roadmap for IT enabled Financial Inclusion” as the name suggests, endeavors to bring together key decision makers across Financial Institutions, Technology Organisations and Government Departments to explore strategies, ideas available for a successful implementation of ‘Financial Inclusion’.