The buildup around Prime Minister Modi’s Independence Day speech was palpable in the EPoD/BCURE office last week. My research group does quite a bit of work on financial inclusion in India and so rumors that Modi would announce a financial inclusion plan had not a few people talking.
In fact, the PM did announce a financial inclusion plan to open bank accounts for 75 million Indians by August 2018. It’s an ambitious plan, to be sure, but it struck me as rather odd. The way the papers presented the plan, Modi introduced the plan by talking about how many people have mobile phones in India, but nobody has a bank account. My head went immediately to the thought of “well, maybe he wants to expand mobile money use in India.” Despite the presence of quite a few mobile money providers in India, mobile money is used in very few transactions. This is very different than a place like Kenya, where mobile money is extremely widely used.
I’m not sure that mobile money is the best answer, but I think it’s at least an interesting use of existing infrastructure, as opposed to brick and mortar banks with minimum transactions and high withdrawal fees, for instance.