Paper

Enabling Rural Banking through Technology

What role can ICT play in financial inclusion of the rural community?
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This paper sets out the need for financial inclusion of the rural community for Indias development and the important role that information and communication technology (ICT) can play in this endeavor.The paper states that:

  • There is an urgent need to deliver services to the rural Indian population in a cost effective way with assured quality;
  • ICT can be harnessed for improving the efficacy of credit delivery and for minimization of the transaction costs involved;
  • There have been many rural banking delivery channels and multi-agency approaches to rural lending, starting from cooperatives to non-bank financial companies (NBFCs);
  • However, there are many areas for improvement: credit uptake and its quality, speed of loan processing, etc.

The paper:

  • Suggests an integrated framework for the use of ICT in delivering rural services in a cost-effective, financially viable and sustainable manner;
  • Identifies the major issues in rural finance and indicates possible ways for the use of technology in improving the situation;
  • Describes a model for establishing rural information infrastructure and supporting the delivery of banking services to rural people;
  • Presents findings from its pilot implementation;
  • Outlines a model for rural services with banking and ICT as core infrastructure.

It concludes by indicating how ICT can be harnessed for achieving financial inclusion.

About this Publication

By Satchidananda, S.
Published