Jim Rosenberg, Communications Officer for the CGAP (Consultative Group to Assist the Poor) Technology Program, recently interviewed Bindu about how the financial system in India might be configured to deliver complete financial service access.
Excerpt below from the CGAP Technology Blog:
What is the approach IFMR advocates for that is different from all the other models being used in India, such as scaling up microfinance institutions (MFIs), reforming the cooperatives, promoting the self help group/bank linkage model, or the current favorite of policymakers, the business correspondent model linked to the use of technology?
Our vision for the Indian financial system has three parts:
- An adequate number of local, high-quality financial providers that provide complete access to financial services. (We have borrowed heavily from Prof. Jonathan Morduch in defining complete access to be: reliability + continuity + convenience + flexibility + increasing financial well-being.)
- Orderly ways for systematic risk to be transferred from these local providers to risk aggregators. This would be done through mechanisms like reinsurance and securitization, among others.
- The presence of well-regulated and well-capitalized aggregators like commercial banks, mutual funds, and insurance companies.
To read the full interview click here.