Banks at your Doorstep: How Good is the BC Model?

LEAD Research Team | August 22, 2012

Lack of familiarity with a particular system and low level of technological sophistication often poses as obstacles to the promotion of electronic cards and mobile phone banking among the poor, especially people who live in the rural areas. As a result, the banking correspondent (BC), or doorstep banking model was introduced in India to bring basic banking services to rural people. Clients of BC programs include mainly households with very low incomes and poor access to the formal banking system. At CMF, we have

Rise of the Tier-II Banks?

LEAD Research Team | August 16, 2012

While looking at the usual news updates at the CMF E-Library, I happened to come across an article originally posted at the Economic Times some time ago about a new announcement coming from the RBI. Here is the link: Click Here It would amaze anyone as to why banking in villages and rural areas persay has not been looked at with any kind of importance. It it had been looked at with at least half the importance it is given

Hedging Against Yourself

LEAD Research Team | August 8, 2012

Most of us might have a vague idea of what retirement should be like. Some of us might even have started planning for it. The rest of us are probably waiting for one of our ‘future selves’ to do it. Economists claim that savings adequacy is considered to be that which makes the ratio between post-retirement income and current income at least 70 percent. It might be relatively easier for economists to make such calculated decisions but for us lesser mortals,

Microfinance and Inclusive Growth: What are the Measures of Success or Learning?

This post is the detailed description of session one of the Financial Inclusion 2012 Conference. The aim of this session was to lay out the distinct features of microfinance that have a positive impact on the lives of its clients. The panel set out to review the lessons learnt from the sector and reflect on its mission. The discussion was moderated by  Mr. Matthew Titus, Executive Director of Sa-Dhan who expertly steered the discussion as well as involved members of the

Newsletter Article – What is Rainfall Insurance? Advantages and Key Bottlenecks

Dhruv Sood | July 11, 2012

Despite the gradual increase in irrigation, almost 65% of the Indian agricultural sector still depends on erratic and unpredictable monsoons. Cropping decisions- like which crop to plant, time of sowing, which inputs to use- generally depend on the advent of the monsoon season as well as on farmer expectations of rainfall. Owing to the more unpredictable nature of monsoons in recent years, when there is little (droughts) or too much rainfall(floods) farmers face serious risks and stand to lose a

Newsletter Article – Microsavings – Marketing and Impact Experiments

LEAD Research Team | July 11, 2012

The Centre for Microfinance (CMF) brings to the spotlight the research agenda in various facets of the financial inclusion agenda, including results from rigorous social experiments[i] around the world as well as the policy agenda for which this research is designed. This article compiles several studies and background literature on Microsavings. The literature on formal savings starts by saying that members of the poorest section of a society often choose to stash their savings under mattresses due to lack of

Newsletter Article – Measuring Financial Literacy

Parul Agarwal | July 11, 2012

The case of little response from the target population towards both the conventional and innovative financial products in rural areas has received a lot of global attention. It has been suggested that low literacy levels and, more importantly, the lack of financial awareness are responsible for this phenomenon. In order to address this issue, numerous financial literacy training programmes have been designed, tested, and implemented using various methods and technological setups. Significant research has also been done to evaluate the

Newsletter Article – Rethinking RBI’s Regulations for MFIs

Deepti KC | July 11, 2012

The Microfinance Institutions Bill has been cleared by the Union Cabinet and introduced to the Lok Sabha. If approved, MFIs would by regulation be required to register with the Reserve Bank of India (RBI). The Reserve Bank of India (RBI) has already released specific guidelines regarding the eligibility of microfinance institutions (MFIs) for priority sector lending. In an attempt to understand the RBI guidelines in the context of microfinance clients, 928 clients were interviewed in Karnataka, Maharashtra, Tamil Nadu, Uttar

Newsletter Article – Digital Data Collection – Experiences from Uttar Pradesh

Sitaram Mukherjee, Mudita Tiwari | July 11, 2012

In partnership with FINO, CMF is evaluating a door-to-door step banking services, FINO has a network of Business Correspondents or Bandhus, who open no-frills savings accounts with the Union Bank for the clients.  They operate in areas where formal banking services are not available and clients belong to low-income groups.   The Bandhus use terminal (hand-held) machines to conduct savings and withdrawal transactions. The baseline data collection was conducted in Varanasi and Azamgarh districts of Uttar Pradesh to assess the household

Digital Data Collection vs. Data Collection on Paper

LEAD Research Team | July 9, 2012

While digital data collection is a significant departure from the usual paper and pen data collection method, there are both advantages and disadvantages to each data collection method.  However, digital data collection is a step into the future because it allows for integration of data collection, data entry and data checks much more efficiently over a shorter time frame.  Before making a decision to use digital or paper formats, the management must keep the cost, quality, staff quality and infrastructure