Dr. Bimal Arora: With over eighteen years of work experience spanning sectors and development issues, Bimal is associated with several organisations, including the UNDP and UNRISD and is on the Advisory Board of CSR International, UK. After spending six years in the UK, researching and consulting on Corporate Social Responsibility (CSR) and Inclusive Business Models, Bimal returned to India in 2009. Bimal has published several case studies on CSR and Inclusive Business Models. He is currently working on a book entitled ‘The Political Economy of Corporate Responsibility in India’ for publication by Chandos Publishing (Oxford). Bimal did his Master’s from the London School of Economics (LSE) and PhD from the Nottingham University Business School, UK (The International Centre for Corporate Social Responsibility (ICCSR).
A Little World is an Indian company facilitating safe and efficient mobile-banking in rural India by offering a secure, low‐cost technology driven delivery platform for financial services through special mobile phones.
To download A Little World case study from the GIM database, please click here.
What is the state of financial inclusion in India today?
India is enormously vast – both geographically and demographically, with several regional disparities. Consider the current scenario – out of 600,000 habitations in India, clusters with population of 100 or more, only about 30,000 have a commercial bank branch. So it’s not surprising that just about 40% of Indian population has a bank account, 10% has life insurance coverage and 0.06% has non-life insurance. Creating a traditional banking infrastructure in such a vast geography is rather infeasible and therefore business models, backed up with technology platform introduced by A Little World (ALW), can be a solution to the problem of financially excluded population.
People at the bottom of the socio-economic pyramid need a safe, convenient, reliable, hassle-free, proximate, affordable and friendly system for financial transactions. Whosoever is able to offer that will be the winner. Besides, it’s not just the people who will be benefitting. By integrating more than 50% of population into the formal economy, it’s the national economy which too will benefit. Private entrepreneurs in the financial inclusion space will create value for themselves, for their shareholders and for all stakeholders concerned.
What are some recent advances that hold great promise?
The Government of India and the Reserve Bank of India have been promoting and encouraging the formal financial institutions to proactively engage in financial inclusion measures, but they face many limitations, including the vision, motivation and ingenuity to spread so thin. Entrepreneurial ventures like ALW/ZMF, FINO, KGFS, Eko etc. by integrating different technologies, expertise in developing the field presence utilising the local resources, and with constant innovation offer to bridge the gap, and hence hold great promise.
ALW and ZMF’s strategy of leveraging the NREGA and similar government schemes to rapidly scale up and create a national infrastructure to deliver financial services to rural areas will be the key differentiator in the long run. This is unlike government’s current approach to have millions of Business Correspondents operating to serve the market. In a way, ALW and ZMF combined are creating unheard of model for India and most of the developing world.
What are the implications of the Unique ID in India for financial inclusion?
In the long run, the Unique ID project in India will definitely be useful for financial inclusion initiatives, but my feeling is that in the initial stages, it is the Unique ID project which will benefit from ventures such as ALW/ZMF.
What are some remaining challenges in the sector? Do you have any recommendations?
As the business models in the financial inclusion space are still evolving, currently the government and the regulators in India are cautious. Much will depend upon the entrepreneurial creativity, skills and energy of the private players, as they continue to feed into the policy learning and development with their field experiences. Strengthening the new ventures on financial inclusion by supportive and convergent policies in banking, telecom and related areas is required.
What has been your personal experience going through the case writing and research protocol process with GIM?
It’s been a very gratifying experience for me personally. Besides the wonderful opportunity to engage, learn and network with the GIM team and a wider set of scholars globally, the opportunity to interact with innovative people who are engaged in developing inclusive business models, exploring and understanding their minds, strategies, challenges, excitements, and dilemmas has been truly great. I have tried to cover the details in my cases as extensively as possible and am hoping the readers will find these cases insightful.