Financial Inclusion: Role of 4G, Mobile and Pradhan Mantri Mudra Yojana

The PMJDY (Pradhan Mantri Jan Dhan Yojana) and BSBDA (Basic Savings Bank Deposit Accounts) are the buzzword in the financial inclusion efforts. There were 44 Crore BSBDA accounts in September 2015 against 39.8 crore in March 2015. Further, there are 5.53 Lakh bank outlets in the country. Since the brick and mortar model is an integral part of the banking system, the RBI has advised the banks to identify the villages with population more than 5000 without an SCB (Scheduled Commercial Bank) branch.

Role of 4G and Mobile in Financial Inclusion

The economic survey identifies the mobile networks as one of the key tools for financial inclusion. It notes that the enhanced mobile payments technology along with 4G introduction would prove to be a game changer. This would not only further the cause of achieving 100% financial inclusion but also would facilitate implementation of government’s social sector schemes in a faster and more secure manner. Further, the connectivity through optical fibre network would also transform the delivery of these programmes and boost the telecom sector. The survey notes that:

  • Government should take advantage of the deep mobile penetration and agent networks by making greater use of mobile payment technology.

Mobiles can not only transfer money quickly and securely, but also improve the quality and convenience of service delivery.

Financial Inclusion: Pradhan Mantri Mudra Yojana

In pursuance of the announcement in the Union Budget 2015-16 of the setting up of a Micro Units Development Refinance Agency (MUDRA) to refinance last mile financers, the Pradhan Mantri Mudra Yojana (PMMY) has been launched on 8 April 2015. MUDRA seeks to offer refinance products having a loan requirement up to Rs. 10 lakh and support to micro finance institutions (MFI) by way of refinance. The products designed under the PMMY are categorized into three buckets of finance named Shishu (loan up to Rs. 50,000 ), Kishor (Rs. 50,000 to Rs. 5 lakh) and Tarun (Rs. 5 lakh to Rs. 10 lakh) based on the stage of growth/development of the micro business units, with about 60 per cent of the allocation to Shishu.

The PMMY aims to provide formal bank credit to the more than 5.7 crore existing informal sector micro enterprises and many more aspiring micro entrepreneurs in the country.

The total amount disbursed under the PMMY up to mid-January 2016 stood at Rs. 84,672.36 crore, of which Rs. 38,057.33 has been disbursed under Shishu, Rs. 28,359.87 under Kishor and Rs. 18,255.16 under Tarun. In all 2.19 crore borrowers have benefited so far, of which 1.62 crore are women, 77.12 lakh are new entrepreneurs and 1.10 crore belong to the scheduled caste/scheduled tribe/other backward classes category.