Providing financial services to the poor through banking correspondence model
This Microsave Focus Note examines the use of banking correspondent model by Equity Bank and Grameen Bank and their implications for Indian microfinance.
Equity Bank witnessed rapid growth by responding to client needs, providing excellent customer service and implementing information technology in its delivery channels. Similarly Grameen Bank experienced massive growth by changing its product design and target clientele. MicroSave has been advocating the use of the banking correspondence models to:
Offer clients financial services that meet all their financial needs;
Deliver financial services at transaction points close to clients’ residences, allowing them to transact easily and as often as they need;
Provide clients with convenient services;
Leverage technology to increase transaction efficiency and reduce costs.
Current regulatory environment in India is suitable to achieving financial inclusion and is supported by growing number of mobile network operators and agent network providers. The note states that over time, mobile money platforms will offer multiple products, revolutionizing financial inclusion and providing a variety of financial products and services to the poor.