A veteran in the Banking and Financing sector, Ajeet Kumar Singh is the Founder Director, MD & CEO at Save Solutions Pvt. Ltd. – one of India’s award-winning Business Correspondent Networks. In his role at the company, Ajeet Kumar is at the helm of everything from developing partnerships with new banks, to acquisitions. He also draws from his immense experience, to spearhead the company’s administrative duties and oversee the development of IT infrastructure.
In the past few years, the financial service sector has undergone major transformations through the emergence of new-age technologies. The evolution of Fintech has further improved financial accessibility in India. With more than 825 million internet subscribers, digital payment and banking services have seen a significant boost. As one of the largest digital markets in the world, the adoption of Fintech in India stands at 87%, harnessing financial inclusion in the country.
Building A Robust Economy Backed By Digital Solutions
The key role of technology in driving financial inclusion can not be ignored. In the digital financial ecosystem, while banking takes precedence, it also allows the facilitation of credit, savings, and insurance.
Digital solutions have further made financial services accessible for all. It has majorly seen an upswing during the pandemic, as more people have shifted to online modes of payment. Innovative solutions like IMPS, UPI, and AePS have revolutionized transactions’ processing. It gives the users a viable option to make payments anywhere and anytime. Reports indicate that in 2021, transactions worth Rs. 73 lakh crores were conducted using UPI. The whooping number clearly indicates India’s increasing hyper-connectivity and improved digital banking.
Unfolding Credit Accessibility
When it comes to availing of financial assistance, Fintech plays an important role in eliminating the credit barriers for businesses and individuals. They have widened the reach with easy access to digitally equipped financial services. Using AI and ML technology, these Fintech solutions have made small credits, social security schemes, etc. accessible for credit-worthy borrowers. Furthermore, the financial market ensures due diligence with biometric identity databases, virtual payments, and digital payment interoperability. An authorized KYC ensures end-to-end security while reducing the extra paperwork.
Digital financial inclusion has gained prominence as the building block for creating opportunities for economic growth and reducing poverty. More digital banks and financial institutions are also striving to change the lending game by instilling easily qualifying norms. In terms of credit norms, they go beyond the traditional scheme while empowering the underprivileged and under-served segment of society.
Initiatives Paving The Way For Financial Inclusion In India
For years, the gap between demand and supply of financial credit has remained intact. However, the adoption of digital technologies has gradually democratized financial services for the masses. World Bank has recorded that over 31% of adults do not have a transaction account. In an initiative, World Bank’s Universal Financial Access focused on promoting the use of electronic tools to store, send and receive money. As financial inclusion fosters a progressive economy, the government of India has also taken multiple initiatives to support the cause. For instance, the Pradhan Mantri Jan Dhan Yojana (PMJDY) intends to set up new bank accounts for beneficiaries, thereby increasing financial inclusion in the country. This helps Fintech solutions to reach a higher consumer base in India, thereby supplementing financial inclusion.
In a traditional setup, banks and financial institutions depend majorly on an individual’s credit score, leaving the unbanked segments out of the credit-worthy bracket. Financial inclusion aims at resolving this issue. Leveraging modern tech solutions, digital lenders are enabling credit access to all. As a result, it minimizes the demand and supply gap, enabling progressive future plans for businesses.
The financial ecosystem of India has witnessed significant progress. With the emergence of digital financial solutions and government initiatives, the Indian banked segment is increasing at a faster pace. Pacing ahead with new-age innovations, the country is paving the way for financial inclusion by providing financial services to the underbanked sectors while creating a stable ecosystem supporting overall economic growth.