Thursday, November 17, 2016

Research related to financial inclusion

                              A socio-economic survey camp, Howrah, West Bengal
                           Report by Devinder Sharma, 
                                          Picture: Wikimedia Commons
There is a desire in India that the country should soon become a “cashless economy”. It is important that researchers in the fields of banking, commerce, management, ethnography, design, computer science should look into the problems that need to be addressed in taking banking to the poor and the illiterate.

The following questions are worth studying in this context:
What are the skills and knowledge required to operate a bank account, to use a debit card, and to use an ATM? Can any literate person manage these tasks? What level of literacy does one require? Can we do surveys to find out if people with low levels of education have (or do not have) useful access to banking? What are the practices for issuing cheque-books, debit cards etc.? Have any studies answering questions like these? Where have they been published? 

These are problems of major interest in India. “India currently has the largest population of illiterate adults in the world with 287 million”, said a 2014 report in “The Hindu” newspaper

“A 2015 Unesco report said that in terms of absolute numbers, India - with 28.7 crore illiterates - was the country with the largest number of adults without basic literacy skills in 2010-11 compared to 2000-01 when it had 30.4 crore illiterates”. Visit

A publication by the Indian Banks Association said “Normally no cheque book facility is provided to illiterate persons and blind persons. However, to meet periodic repayment of retail loans, utility bills etc. we will consider issuing of cheque book with safeguards to protect your interest”. Visit and look for the paragraph with the heading “8.1.5 Special Accounts”.

Compare the change mentioned in the Unesco/Times-of-India reference cited above. Illiteracy declined by only 1.7% from 30.4% to 28.7% over the first decade of the 21st century. We hear the phrase “financial inclusion” fairly frequently. Unless the plight of the 28.7 Crore is well understood and documented, it would be difficult to extend the benefit of banks accounts, ATMs and cards to them. We should also find out if all those that are said to be literate do in fact benefit from banking. Are there several crores among them who find banking too intimidating to use in any significant manner?

1 comment:

Srinivasan Ramani said...

I had posted a question on ResearchGate:
What are the problems in extending the benefits of banking to over 250 million Indians who are illiterate?
Visit What are the problems in extending the benefits of banking to over 250 million Indians who are illiterate?
One of the replies was from Vincent Konadu, who recognized one problem that many (potential) bank customers in India face in using ATMs. (In fact, many of them probably do not use ATMs at present because of this problem). This is the problem of the illiterate customer understanding what the ATM displays. He suggested that ATMs should use speech communication in Indian languages. My response is given below.

Vincent Konadu has hit the nail on the head! Indian Readership Survey Look for pdf file TOPLINE FINDINGS shows that, on the basis of their 2014 survey, there are 89.7 million readers of Hindi, Malayalam and Tamil newspapers if we consider only the top ten newspapers - in terms of their readership. In comparison, the only English newspaper in this list of ten is in the eighth place, and has only 7.6 million readers. The Indian population has over 600 million people above 18 years of age, and 85% of them do not read newspapers. So, having the ATM communicate by voice in a local language makes very good sense”.

This suggests a good student project, which should implement a simulated ATM interface including an Indian language speech interface. I would suggest the use of recorded speech fragments, with speech synthesis only to read out numbers. No speech input need to be accepted as the ATM user needs only to enter numbers and make selections through a touch interface.