Implementing India – What about Financial Inclusion.

Reprint of Blog from India Economic Forum Winter 2010 by Carol Realini

My first trip to India was three years ago, now when I fly into Mumbai I feel like I am coming home. Although each time I come here there are so many changes. It is all happening quickly – physical infrastructure improvements like the new metros in Delhi and Bengaluru, government initiatives like ADHAAR  (universal biometric identity) and NPCI (faster retail payments), rapid business growth like the mobile subscriber base growing from 150 million on my first trip three years ago  to 670.6 million last count. All creating the environment to make big strides forward with financial inclusion.

For me, this India Economic Forum is all about engaging more deeply with leaders to discuss how we work together to make financial inclusion progress quickly. The opportunity is clear but so are the challenges. 41% percent of India’s population does not have bank accounts. Data gathered in April 2009 showed 46% of mobile phone owners did not have a bank account. (I expect that % is increasing since mobile growth in rural India has been significant in the last 18 months.)

Mobile financial services will bring banking to those who have been chronically underserved. The reason is simple – it lowers cost and increases distribution. When it scales it is transformational. I have seen it in Kenya where we operate with an India owned mobile carrier – YU (owned by Essar). My hope is to see the same thing happen in India in the next three years. So by 2014 – every person with a mobile phone in India has full access to affordable financial services that empower their life and work and participate in the rapid economic growth (over 8% for 2010) that India is experiencing. Mobile carriers are faced with a challenge – steady decline in ARPU from over Rs 300 per month in 2006 to less than Rs 120 per month in 2010 and therefore need to find additional sources of service revenue by leveraging their consumer reach.  Banks on the other hand need to extend their reach and need a stimulus to enable them to profitably serve the unbanked and face the challenge of high cost of customer acquisition and insufficient rural coverage. In order to achieve total financial inclusion these two distinct worlds need to provide their strengths to each other.

I know many India Economic Forum attendees share my hope for financial inclusion. So to realize the potential here, we need to work together; mobile companies, financial service companies, innovators, non profits, regulators and government must work together. The World Economic Forum has a long track record for forging alliances to tackle big global challenges. Important discussion topics are:

  • What  business models will allow high levels of service, encourage innovation, and create scale.
  • What applications are most important to ignite the market and create critical mass of users (government disbursements, business collections, and money transfer)?


  • How do we ensure we reach and serve those who need it most?

I will blog during the program and also you can follow me on Twitter – carolrealini

About Carol Realini

Serial Entrepreneur, Mobile Payments and Banking Pioneer, Author, Board Member Carol Realini is a successful Silicon Valley executive and expert in financial service innovation. She has worked with leading financial institutions including MasterCard and Citi, as well as numerous multinational and regional banks, to change the way banking is conducted. In 2011, as a Technology Pioneer attending the World Economic Forum, she led discussions on alternative banking at their meeting in Davos. A serial entrepreneur, she has been recognized as one of the 50 Top Women in Technology by Corporate Board Member magazine. Carol is a huge believer in the potential of mobile banking and payments to create financial inclusion - where everyone with a mobile phone has access to affordable financial services that empower their life and work. To understand Carol's vision please watch the WEF video (click on the link below). Carol also mentors entrepreneurs providing wisdom and lessons learned from her four successful startup experiences.
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