Are Formal and Semi Formal Financial Institution Partnerships a Viable Option for Serving the Underserved in India
Are formal and semi formal financial institution partnerships a viable option for serving the underserved in India
Xavier Institute of Management Bhubaneswar
10/6/2010
Indu Paramita Mahapatra and Malay Harsh
The essay tries to identify the potential problems with financial sector and does a gap analysis that leads to potential opportunities in the sector. It also takes a look at the challenges faced by the different financial institutions, the goals achieved, the targets to be achieved and how the partnership between the different formal and semi formal institutions can create a synergy for serving the underserved of the country.
Introduction:
The reach and availability of finances determine the growth and development of any enterprise. Then how could the development of a nation be any different from it? It must be duly noted that majority of the country’s populace is out of the purview of the financial services which means more than half of our nation lacks access to savings and credit facilities among other financial securities and services such as investment options and insurance policies.
Where we the urban literati state ourselves to be heavily hassled by the innumerable calls and emails trying to sell us a loan or investment options, these very same options are visibly amiss in the large rural pockets, places where they might be actually be needed. The fact is, there is a gap between the financial services needed and what is available.
Problem With financial services in India: Current scenario
India’s Economy Growth rate has been around 8.5% - 9% (last 5 years). Our growth primarily has been in the industry & services sector which has grown by about 16.8 percent. Even though agriculture is the principal means of livelihood for over 58.4% of India's population, the growth in this sector is limited to around 2.8%. Of the many factors that attribute to poor growth in agriculture, a major reason is lack of
Xavier Institute of Management Bhubaneswar
10/6/2010
Indu Paramita Mahapatra and Malay Harsh
The essay tries to identify the potential problems with financial sector and does a gap analysis that leads to potential opportunities in the sector. It also takes a look at the challenges faced by the different financial institutions, the goals achieved, the targets to be achieved and how the partnership between the different formal and semi formal institutions can create a synergy for serving the underserved of the country.
Introduction:
The reach and availability of finances determine the growth and development of any enterprise. Then how could the development of a nation be any different from it? It must be duly noted that majority of the country’s populace is out of the purview of the financial services which means more than half of our nation lacks access to savings and credit facilities among other financial securities and services such as investment options and insurance policies.
Where we the urban literati state ourselves to be heavily hassled by the innumerable calls and emails trying to sell us a loan or investment options, these very same options are visibly amiss in the large rural pockets, places where they might be actually be needed. The fact is, there is a gap between the financial services needed and what is available.
Problem With financial services in India: Current scenario
India’s Economy Growth rate has been around 8.5% - 9% (last 5 years). Our growth primarily has been in the industry & services sector which has grown by about 16.8 percent. Even though agriculture is the principal means of livelihood for over 58.4% of India's population, the growth in this sector is limited to around 2.8%. Of the many factors that attribute to poor growth in agriculture, a major reason is lack of