Technology to Be Key Enabler of Financial Inclusion: Samit Ghosh
Friday, October 2, 2015
While ten entities are on the cusp of becoming small finance banks, aiming to bring the financially excluded population of the country under the banking purview, technology will be the game changer in the space, said Samit Ghosh, chief executive officer and managing director, Ujjivan Financial Services Private Limited.
“We need technology disruption in the financial services space, which includes assisted ATMs, mobile technology, mobile wallets and other services. Both the government and the Reserve Bank of India (RBI) have put financial inclusion on top of their agenda. So, there is an enabling environment for us to succeed. If we bring in technology and a change in mindset in terms of providing the kind of service these people require, I think we will be successful,” said Ghosh, who received the Entrepreneur with Social Impact award at the fifth Forbes India Leadership Awards (FILA) in Mumbai on Wednesday evening.
Last month, Bengaluru-based Ujjivan was among the 10 entities that bagged an in-principle nod for a small finance bank (SFB) from the central bank. A total of 72 entities had applied to become SFBs. According to the RBI, the objectives of setting up SFBs are greater financial inclusion, through the provision of savings vehicles, and the supply of credit to small and micro businesses.
Ghosh points out that the SFB is a specialised institution, whose main purpose is to provide financial inclusion, and cannot be operated as a regular commercial bank. For an SFB, 75 percent of the loan portfolio has to be earmarked for the priority sector. “If we follow the same track of a commercial bank to provide services to our customers, we won’t be successful. There are over 600 million people in our country that need banking services and their transaction sizes are very small,” he said at the event.