Cashless digital economic system ensuring access to banking, financial literacy, and digital payment solutions in rural India.
The vision of FIA is to transform a billion lives using the power of people, network and technology.
"About half the world is unbanked". The stark reality is that most of poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. In India, this translates to 400 million people who manage their finances on a cash-only basis and have restricted or no access to digital financial services. Since growth by itself doesn't percolate to poor and deprived sections, the paradigm has to shift to inclusive growth. An inclusive digital economy has to be an integral part of poverty alleviation strategies and building an inclusive digital financial system is the first step towards inclusive growth and sustainable prosperity.
FIA is pioneering the next-gen digital highway by expanding portfolio of services to become a full services firm for socially impactful products & services catering to un-served geographies--financial services, education, affordable health care, green energy, clean water and sanitation. Studies have shown a strong link between the degree of financial exclusion and rates of poverty and inequality. The higher the financial exclusion, the higher the inequality and poverty (Thorat, 2008). Since growth by itself doesn't percolate to poor and deprived sections, the paradigm has to shift to inclusive growth.
By building an inclusive digital financial system and directing government to customer (G2C) payments through this channel in a targeted manner, FIA has already started optimizing the impact of social protect payments and Cashless Digital Economy to reduce poverty.
Serving the unbanked is not just about satisfying their financial needs alone. It's about "inclusion" in the truest sense--financial services, education, affordable health care, clean and renewable energy, etc. Social and economic inclusion is the ultimate aim of FIA.
The target customers of FIA are the financially excluded population who live or work in financially under-served geographies. In India, bank accounts have been opened, but meaningful inclusion is yet to be achieved as only 30% bank accounts are operational. More than two-third of the unbanked are women and there is a higher percentage of unbanked in minority groups in urban India. The micro-entrepreneurs and migrant workers are adversely impacted for lack of digitisation. These include rickshaw pullers, construction labourers, factory workers, maids, chefs, drivers, gardeners. In rural India, subsistence farmers need digitisation for financial growth and security of transactions
Despite admirable strides in deepening financial inclusion, India continues to be a cash-based economy. Three key issues that hinder the growth of digitalization of transactions are:
(a) lack of an enabling infrastructure for adopting cashless payments
(b) low awareness in communities on the possible merits of cashless transactions and
(c) lack of an appropriate model and instrument for assessing the impact of these initiatives.
FIA's three-pronged strategy to sustainable inclusive digitization include:
A. plan for deepening financial inclusion and working with the under-served to bring about sustainable behavior change in the way they transact
B. Digitize income streams. It has been observed that if the income stream is digitized, there is a higher probability that the individual will transact digitally
C. Digitize payments to micro and small merchants who deal only in cash. They play a key role in under-served communities and they can be leveraged to promote digitization among financially underserved communities.
FIA is also testing acceptable digital payment solutions, implementing literacy drives, awareness camps and capability building programs and deploying targeted strategies for financially including women, children and senior citizens from marginalized communities.
FIA has scaled up its operation multi-fold reaching out to 1,00.000 villages with a network of 21,000 micro-entrepreneurs, impacting lives of 19 million customers. This has been possible due to the strategic focus on partnerships leveraging social network and technology intervention. FIA has partnered with 19+ banks, 02 insurance companies, 400+ community partners, MSMEs to create a social network for faster scale and deeper penetration, even in difficult geographies. Empowerment of micro-entrepreneurs and merchants as change agents through capacity building programs have driven awareness and impact in underserved areas, where no financial institutions find viability of business.
FIA's roadmap for deepening financial inclusion is:
A. To establish a retail distribution network in every state (28) and every district in India, specifically in underserved geographies and markets to provide access to digital financial solutions.
B. To ensure digital financial services (banking, credit and insurance) are available to 10 million households (=50 million individuals), giving them the opportunity to create, grow and protect their wealth with digital solutions.
C. To launch digital financial inclusion operations in four countries globally by 2024: Nepal, Bangladesh, Philippines and South Africa.