THE ROLE OF FINANCIAL ACCESS, KNOWLEDGE AND SERVICE DELIVERY IN SAVINGS BEHAVIOR AND WELFARE IN BIHAR

Principal Investigators: Santadarshan Sadhu (CMF), Leopold Sarr (World Bank)
Research Team: Mudita Tiwari
LEAD Centre: Centre for Microfinance (CMF)
Focus Area: Savings
Project Geography: Bihar , Jharkhand
Partner: EKO
Status: Ongoing

Background:

Over the past decade, the Indian government has made a commitment to increasing financial inclusion and the sector servicing the unbanked clients has witnessed unprecedented growth. Yet many sections of the population still do not have access to financial services- for example 41% of the adult population does not have a bank account. Further, critical gaps remain in our understanding of how can different banking models (microfinance, business correspondents, door-step banking and so on) be best used to fight poverty. Questions that remain unanswered include: Which financial products have the most impact on the lives of those who take them up? Can the impact of different banking models be enhanced by adding non-financial programmes such as financial literacy training?
EKO program is one of the few institutions to offer “doorstep” banking and financial services. Most of the villages in which EKO operates have little or no access to banks.

To solve these access issues, EKO utilizes a savings program located within the villages. EKO’s delivery mechanism is unique in the sense that the EKO agents, known as the Customer Service Providers (CSPs), undertake the banking transactions in the premises of their primary occupation (attached to his primary business, mostly in a prime location within the village). Thus, the revenues generated by the CSPs are basically supplementary income, rather than being primary income, which makes it a viable business option.