Financial Inclusion- FINO

7/28/2019 Financial Inclusion- FINO

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"Ten years ago, my job was to start from scratch and

move the agenda of private sector involvement in

serving the world's poor," he said. "Now I want to start

from the other end, the idea of democratizing

commerce


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"Ten years ago, my job was to start from scratch and

move the agenda of private sector involvement in

serving the world's poor," he said. "Now I want to start

from the other end, the idea of democratizing

commerce

C K Prahalad

Fortune does lie at the bottom of the pyramid, financial

inclusion has to be seen, not patronisingly but as a survival

strategy for banks.


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Financial Inclusion ? ?

Avg. No. of villages served per bank branch 4

Is the distribution equitable ? ?

90% villages dont have a bank branch within 5 km radius

51.4% of 89.3 million farmer households are excluded

from both formal/ informal sources

Only 27% of the total farmer households, access formal

sources of credit

Source: http://mospi.nic.in/mospi_nsso_rept_pubn.htm


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Rich

Middle

Poor

Marked by low financial literacy

Predominantly in rural areas

but also in semi-urban

Mostly not reached by

formal banking system

Narrow product suiteleading to lack of integration

Same channels attempt to

cater to all customer segments

Untapped


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EKO FINO

A little

world

(ALW)

Financial inclusion

services (payments)


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Started in 2006, in Mumbai

Has 40.41 million customer base & Force of 21,527

Transaction points in 397 districts across 24 states.

FINO is the market leader in delivering products and

services to first and last mile.

Customer service centers

Source :http://fino.co.in/


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Banking

Govt

Retail

Insurance

Technology

Ruraluntapped

customers

Accounting and

MIS systems

Point of

transaction terminalsBio metric smart

cards


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Investors


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Customers

22 banks

10 MFI

4 insurance companies

12 Govt entities

40.41 million micro customers


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Product/Service : Banking

Deposits

SHG loans

JLG loans

Recurring deposits

Domestic remittance

Branchless banking


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Products / services

Government

MNREGA

Social security pension

schemes

Retail

Third party service

Micro insurance

Insurance

Rashtriya Swasthya

Bima Yojna

Technology

Hosted solutions

International sales


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Pricing Cost of operations

cost of margins

Three models of pricing

1. FINO fintech

2. Sale of bio-metric cards/ micro deposit machines .

3. Micro-finance system.


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PriceFINO fintech

No of enrollments of

customers to clients

Bulk remittances of

amount into bank

Sales

Sale of Biometric smart

cards & deposit

machines

Operational cost

on disbursement of

NREGA funds


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Micro finance

FINO grown in to self sustainable model

Started giving loans to MFIS & SHG

Evolving 3-4 financial models to lend to

MFIS AND SHGS

RS . 20 / remittance up to 10,000 @ single transaction

for Micro customers


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Place

Branch less banking

Door to door service Rural micro customers

Point of terminal

Paper less insurance


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Promotion

Rural customers

Link with Govt bodies

1. Panchayat body2. Project officer(NREGA)

3. FINO officers

Financial literacy

No frills savings account

Nukad natak- role play

Clients

Low transaction cost

Rs.50 @ Bank / Rs.16@ ATM

/ Rs.4 @BC

Use of Hi technology and

security

Regulatory issues


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In Panchayat

NUKAD NATAK


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People

Business Correspondents employees

Clients - Institutions Micro Customers - 3rd party / Rural untapped

customers / Bottom of pyramid


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Process

Identify & Approach to customer (mostly

untapped)

Bandhus / BCs

Fills Accounting form for any clients bank

Issue of smart card (photograph & finger print)

Agents door step serviceTransactions


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Process ..

Data recorded cross checked @ Dist. HQ

Data stored to computer

Send to Banks Database / Core Banking

System

Insurance


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Physical evidence

Mobile point of sales machines

Micro deposit machines

Smart cards

Issue of receipts after transactions

Mobile phone, web cam, system.

Bandhus uniform


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Bio metric smart card

Transaction


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Mismatch b/w demand and supplyCustomer needs Institutional response

oFinancial Services for household

needs

oOccupation specific credit

oStructure around uneven cash-

flows

oStructured Cash-flows : Regulatory

Compliance

oNo Documentation oComplete Paperwork as per

product / compliance

oTimings as per occupation; bank at

home

oBranch timings


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Blue Print


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CUSTOMER

BC

Lo InPhysical

Lo InIT

Invisible actions

Contact person

Mobile phones,

Biometric machine

Fill form

Thumb impress

Snap

Issue of smart

cards

DATA BASEFINO

CBS

SCRUTINIZE

FORMS

BANK CBS

Blue PrintLine of interaction

Line of Visibility

D


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CUSTOMER

BC

Line of Visibility

Lo InPhysical

Lo InIT

Invisible actions

Contact person

Mobile phones,

Biometric machine

Insert S Card

Thumb impress

DATA BASEFINO

CBS

BANK CBS

SMART CARD

Collection of money

Issue of receipts

BANK

Collection of money from all BCs

Line of interaction

D

E

P

O

SI

T

SFF

W


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Fail points

Thumb impression Age factor / Soiled Hands

Embezzlement / fraud by BC

Waiting time of rural customers to transact with

BCS

Low cash limits of BCs

High cost of Bio metric cards

Red tape by Govt bodies in releasing funds


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Thumb impression / voice

Characters Thumbimpression Voice

Ease of use High High

Error incidence Dryness / dirt / age Noise / coldsAccuracy High High

User acceptance Medium High

Long term stability High Medium

Source : A practical guide to bio metric security technology

High Penetration Mobile phone & 95% accuracy moving

to voice based transactions


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Reliability

BC S meetingcustomers rendering

required service

Highly Secured MIS.

Responsiveness

BC S trained to assist

micro customers

Fill up forms

Visits 3 times a day ofeach village by walk

Quality dimensions


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Assurance

UID Smart card

Using Bio metric thumb

impression machine

Secured usage of

technology

Empathy

No cherry picking ofend users

No charge from end

users

TangiblesIssue of receipts

Bio metric cards


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Documents

Financial Inclusion- FINO