Financial services secretary urges fintechs to drive financial inclusion
Financial services secretary M. Nagaraju, speaking at the CII's Financial Inclusion and Fintech Summit in New Delhi on 7 July, also asked them to innovate low-cost but effective cybersecurity and anti-hacking solutions and focus on tamper-proofing their financial apps.
'…fintech will actually drive the financial inclusion that is a key driver of both economic development as well as poverty alleviation all over the world. In fact, seven out of 17 SDGs (sustainable development goals) are related to financial inclusion,' Nagaraju said.
He said that for fintech to become the prime vehicle for financial inclusion, it was important that these entities make people more informed by providing financial education and ensuring that consumers using their systems are not unfairly treated.
'I think fintechs have a great opportunity to take financial education to a large number of people in the country. Actually, one of the reasons why many people fall victim to frauds, or cyber frauds, is because of the lack of financial education…The second thing, I think, fintechs should look at is consumer protection. Ensure that consumers using your ecosystem are not unfairly treated, and their complaints are addressed properly, and they are protected from fraud," the secretary said.
Nagaraju said the first step to financial inclusion was providing a bank account. According to the World Bank's Global Findex, prior to the launch of the Jan Dhan Yojana in 2014, 35% of adults in India had a bank account. This number rose to 90% in 2021, especially due to the government scheme.
'Today, we have 556 million accounts under Pradhan Mantri Jan-Dhan Yojana (PMJDY) with a deposit base of ₹ 2.6 trillion. And, two-thirds of those accounts are in rural and semi-urban areas, and 56% are held by women,' Nagaraju said.
He said the government's efforts to cover the unbanked and uncovered villages through the PMJDY had borne results, with June data indicating that 99.9% villages are now covered either by a bank branch or BC (business correspondent) or IPPB (India Post Payments Bank), within a five-kilometre distance. "This is again a remarkable achievement for our country. Total map banking touch points are now 2.13 million, which include branches, BCs, ATMs, and IPPBs,' he said.
The government also launched three social security schemes: the PM Suraksha Bima Yojana (PMSBY), PM Jeevan Jyoti Bima Yojana (PMJJBY), and the Atal Pension Yojana (APY). These schemes aimed to encourage people in lower social ranks to appreciate the importance of social security in terms of insurance and pension cover.
'The cumulative enrolment in the three schemes as of June was 515 million (PMSBY), 239 million (PMJJBY) and 79 million (APY). This is one thing that brought a large number of people into financial inclusion. And when we talk about financial inclusion without considering this segment of the population, it has no meaning,' Nagaraju said.
The secretary also provided details of the PM Mudra Yojana, where, since the scheme's launch in 2015, 535 million loan applications have been approved, and ₹ 34.6 trillion has been sanctioned, with 68% of loans going to women. In the case of the Stand Up India scheme, 275,000 loans have been sanctioned, and ₹ 62,000 crore has been disbursed, with 83% of loans going to women.
'…women have played an important role in accessing financial inclusion. It actually shows the progress the country is achieving, in reaching, in achieving equality between men and women, and also women's empowerment,' he said.
The secretary also said financial inclusion is also followed in informal set criteria, and the government's two schemes—PM Svanidhi and PM Vishwakarma (launched in April 2024)—have done very well. 'Till now, we have sanctioned 450,000 loans, and ₹ 3.6 trillion has been disbursed in the PM Vishwakarma scheme,' the secretary said.
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