Samruddhi: The Madhya Pradesh Model of Financial Inclusion

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.