Case Study

Samruddhi: The Madhya Pradesh Model of Financial Inclusion

Evaluating a financial inclusion model in India
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This paper presents the results of an independent impact study on Samruddhi, a sustainable model for providing banking services within the vicinity of citizens, especially in rural/un-banked areas of Madhya Pradesh (MP) state in India. Under Samruddhi, the beneficiaries get their entitlements through a transparent system, as the money is directly transferred into their biometric enabled bank accounts in the ultra-small branches (USBs) and in non-core banking institutions like cooperative banks and post offices. The study concludes that Samruddhi as a product is robust and technically feasible. Key observations include:

  • Customers treat their banking accounts not as a tool to optimally use them for inclusive growth, but as a means to collect their payments being passed through the USB/customer service point (CSP);
  • There is a strong need for customized financial literacy to be designed and delivered based on the requirements in MP, and considering the newly framed financial inclusion model;
  • A functional macro mechanism is in place for customer protection;
  • The monitoring framework needs to be further developed to cover transaction level, customer level, and products and services level monitoring.

 

About this Publication

By Bhatnagar, K.V., Gupta, A.
Published