India is fast evolving and the banking ecosystem needs to keep pace with the new paradigms of our economy. Growing aspirations in rural India, migration to urban, formation of peri-urban centers et al, has created additional pressure on infrastructure, housing, education, healthcare, public services, among others, and require action at multiple levels. Banking, at the core of economic progress, has both, the challenge and the opportunity to participate in the human, social and economic progress of our society, with a special focus on the unserved and the underserved sections.

Driving Financial Inclusion

The Government is and will remain the key force driving the financial inclusion agenda. Initiatives such as Jan-Dhan and Aadhar have brought countless Indians into the formal financial framework. The expanding penetration of the smartphone and internet in India is another positive for the financial and digital inclusion efforts. With this framework and an empowering setup, the focus rightfully is on enhancing accessibility to the last mile, encouraging (read incentivizing) transactions through the digital channels.

Accomplishing this goal

Small is beautiful

India is a nation with unique challenges that can’t be solved by government interventions alone. Both public and private sector players need to build on the existing policy framework to broaden the reach of financial services. There is tremendous potential for working with smaller-scale, private enterprises that need access to capital, credit, and financial acumen to build their business. Small Finance Banks focus mostly on first-time borrowers for their credit needs and help them embark on a journey of building financial freedom for micro-entrepreneurs as well as small business owners.

Digital and financial literacy

Despite the increased awareness of financial products and digital platforms, there is still a gap in understanding how to leverage it to enhance businesses and income opportunities. It is imperative for the players to partner with the value chain (read ecosystem) and educates micro and small business owners about the opportunities made available by the innovations in digital and banking.

The gender gap

There is a significant gender gap when it comes to women in business. For women, it is hard to avail loans and run their ventures autonomously as compared to men. Initiatives are required to educate women on financial matters and train them on running fruitful businesses by aiding improved access to financial services, to help bridge this gap. Small Finance Banks, with a primary focus on women as customers, are helping reduce this asymmetry in a meaningful way.

Small Finance Banks are part of this wave of new-age, digital-first banks, which, on one side, cater to the credit needs of micro-entrepreneurs, small business owners, and on the other, meet the banking needs (read high yield deposits, doorstep service and digital solutions) of by digitally savvy high-and-medium-income households. This revolution is shaping the aspirations of millions and making a difference, one household at a time.


As the world grows increasingly connected, access to networks and resources is emerging as the greatest pillar of success for people and organizations across the world. India has already made the primary strides towards financial inclusion by helping bring the majority of its populace into the formal banking system. Now is the time to guide Indians to inculcate the ‘digital’ habit to help make us a truly digitally inclusive and financially progressive nation.

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