Rama Bijapurkar is one of India’s most respected thought leaders on market strategy and consumer-related issues in India. She is also a keen commentator on social and cultural changes in the evolving liberalizing India.
In an article in the Business Standard, Rama Bijapurkar discusses the state of financial inclusion in India
Rama Bijapurkar: The business of financial inclusion
The discussion on financial inclusion ought to focus a lot more on building an economically viable and consumer acceptable business model, with a specially designed regulatory ecosystem appropriate for that model. Evangelism or moral pressure to force banks to serve those not so far served by them cannot help square a circle. But a new tetrahedron that is superior to both the circle and the square can be built if we abandon orthodoxy and do not constrain the business model by saying:
(a) Financial inclusion has to be driven by banks because we know how to regulate them, and should not be driven by a new ecosystem that does not have an existing bank as the lead;
(b) it has to be offered below a particular price point which is defined either by some fuzzy-logic comfort level or by a mandated number based on somebody’s test of reasonableness (not the consumer)
(c) the product and service offered to have to look like and be like familiar banking products.
For the rest of the article visit the Business Standard website.