Traveling Tellers, With Electronic Gear, Take Banking to Rural India
Wednesday, October 5, 2011
KOLAD, India – Time was, banks employed armies of human tellers. Later, they replaced many of them with automated teller machines. Now, India is using a hybrid of the two – the human A.T.M. – to expand banking to its vast rural population.
Swati Yashwant, a 29-year-old mother of one, is part of a growing legion of roving tellers intent on providing bank accounts to the nearly 50 percent of India’s 300 million households that do not have them. Using a laptop computer, wireless modem and fingerprint scanner, Ms. Yashwant opens accounts, takes deposits and processes money transfers for farmers and migrant workers in this small town 70 miles south of Mumbai, India’s financial capital.
To reduce the risk of robbery or theft, no transaction by law may exceed 10,000 rupees (about $212). And in practice, many amount to no more than a dollar or two. But with the bulk of India’s population living in villages that have never had a bank branch, Ms. Yashwant, with her electronic devices, is a missionary of financial modernity.
Many Indians “don’t know anything about banking,” she said in her small office here, which is decorated with a garlanded picture of Ganesh, the Hindu god believed to remove obstacles. “I want to open their accounts and help them understand banking.”
Economists and policy makers say mobile agents like Ms. Yashwant – who also are employed in countries like Brazil, Mexico and Kenya – represent one of the most promising ways to help the rural poor save and protect their money. Many people in India who do not have bank accounts, for instance, buy gold necklaces or simply keep cash in their unlocked homes.
“This is something that could be powerful,” said Abhijit V. Banerjee, an economist at the Massachusetts Institute of Technology who wrote “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” with Esther Duflo.
The banking agents enable the poor to easily save money they otherwise might be tempted to spend, Mr. Banerjee said. And when times are lean, people could withdraw money they had saved, instead of borrowing cash at high rates of interest. The accounts earn currently earn 4 percent annual interest, which is standard for savings accounts in India. There are no maintenance fees or charges for deposits or withdrawals.