By- Bipin Preet Singh
In the recent Mann Ki Baat, a lot of us heard Prime Minister Narendra Modi saying that “The Jan-Dhan revolution is a historic movement to bring the poor, downtrodden and marginalised into the financial mainstream.” The mobile revolution and an expanding digital ecosystem have seemingly transformed the financial landscape in the country.
The Jan-Dhan Yojana has brought millions under the formal banking system and, at the same time, fintech companies are further stimulating the financial inclusivity agenda of the government by enabling last-mile distribution and accessibility.
According to NITI Aayog, the volume of all digital transactions increased by about 23 times with 63,80,000 digital transactions for a value of Rs 2,425 crore in March 2017, compared to 2,80,000 digital transactions worth Rs 101 crore till November 2016. This growth symbolises that collaboration of the government and fintech start-up sector can help India move at light-speed in realising its digital ambitions.
In November 2016, the government took the decision of demonetisation to enable a clean economy, free of black money, and to promote digital payments for better accountability. Private players, such as wallets, worked determinedly in supporting the government and enabling digital payments for use cases, ranging from paying for a local cab, medical supplies, milk or groceries. The envelope moved beyond paying bills and organised retail, to include daily-use cases of masses and obliterating the use of cash. The acceptability of digital payments, led by wallets or the Unified Payments Interface (UPI), has had a remarkable impact on India’s digital economy.
Digital payments have also become a user’s entry point into the formal financial system. The millennial generation is fuelling this growth, spending an average of 17 hours per week online and 40% of them transact online. The smartphone user base, at present, has touched 300 million in the country, of which over 100 million are active mobile wallet users. A number of telecom companies, including the PSU BSNL, have started to deepen financial inclusion to the vast under-banked masses by fostering associations with new-age wallet companies, and in one stroke more than 100 million customers of BSNL, largely in rural areas, can benefit from digital payments.
With digital payments becoming ubiquitous, mobile wallets are deepening financial inclusion by offering micro credits to customers. Within a few years, users would be able to avail of insurance, loans, investment and mutual funds, in addition to executing basic payment functions through their phones.
Financial and digital literacy, however, remains an area of concern, especially in rural areas of the country. Although the digital revolution has brought benefits to millions of Indians, the basic understanding of various financial services is limited across segments of the population. The digital financial literacy training, launched earlier this year, facilitates access to such instruments for one crore rural citizens. In fact, at the ‘Champions of Change’ meet that was organised recently, entrepreneurs underlined on inclusion of financial literacy as a subject or module in school, college, and skill development institutes for endorsing Digital India.
There is no doubt that India will be a digital superpower within the next decade, leading digital payments revolutions in Asia. The advent of financial literacy and mass disbursement of financial services will ensure that a billion Indians will be able to realise their financial aspirations, removing the under-banked from India’s economic phrasebook.
The author is founder of MobiKwik.