Recently Bill Gates had discussions with the Indian PM regarding the national financial inclusion scheme in India and expressed his support regarding the same. Bill and Melinda Gates appreciated the initiative by the Indian Government and Narendra Modi’s prioritization of financial inclusion.
The financial inclusion scheme saw the opening of a large number of bank accounts on a single day. The government of India came up with the scheme for 75 million families who do not have bank accounts. On August 28th, Narendra Modi, officially declared the opening of 15 million bank accounts across the country as a national-level initiative. The prime minister is looking at an employee base of 725,000 in order to reach the target of 75 million new bank accounts in the near future.
Fifteen million account activations were made possible via thousands of bank-endorsed camps set up through the country. Around 600 programs and 77,852 camps were organized on the opening day of these 15 million accounts. The social-uplift program aims at bringing the poor and unbanked into the financial mainstream. Sixty-eight percent of India’s population is without a bank account.
Some additional benefits people receive under this program are a RuPay debit card (RuPay is equivalent of UnionPay in china, India’s answer to MasterCard and Visa.), $1667 in accident-insurance coverage and, if they sign up before Jan. 26, 2015, additional life-insurance coverage of $500. Also, after the first six months of satisfactory operations, the account is eligible for $83 as an overdraft facility. Subsequently, there are plans to use these accounts to provide of micropensions. The initiative was launched simultaneously at 76 centers across the country by government officials.
The Bill and Melinda Gates Foundation comes as promising player with its Financial Services for the Poor program. It is working towards expanding the reach of digital payment systems to poor and rural areas. The foundation’s approach has been towards reducing the amount of time and money that poor people must spend to conduct transactions. It is working towards increasing poor people’s capacity against financial shocks and providing them income-generating opportunities.
The foundation aims to digitally connect large number of poor people to financial service providers, government services and businesses. And they are looking at innovative ways to expand access and encourage markets. The foundation is supporting research and experiments to identify design features, price incentives and marketing messages that will encourage the poor to adopt digital financial services.
The foundation is supporting policymakers like Narendra Modi to encourage development of policies and regulations that facilitate the development of financial inclusion services. With the new financial inclusion scheme launched in India, the foundation might look forward to working with the Indian government, financial standards-setting bodies and the private sector as well to impact the access to financial services.