'MFIs can help in expanding social security schemes coverage'

Micro finance institutions (MFIs) are better placed to help expand coverage of social security schemes, PFRDA Chairman Hemant G Contractor said today.
"At MFIs, they are located in rural areas, they are ideally placed to distribute these social security products which the government comes out with," Contractor said during a panel discussion at National Financial Inclusion Conference 2015 here.
The discussion was based on convergence of government's social security programmes with microfinance and emerging scenario.
Government has announced a series of social welfare schemes such as the Pradhan Mantri Jan Dhan Yojana, MUDRA Yojana, Bima Yojana as well as has given renewed thrust to the Direct Benefit Transfer (DBT) programme.

Contractor said MFIs have build a deep relationship with customers through hard work over several years and many of them have a very large customer base.
When asked about Supreme Court's verdict on limited use of Aadhaar number, he said it will not have any material impact on PFRDA's social sector schemes.

PFRDA regulates the National Pension Scheme (NPS), subscribed by employees of central government, state governments and by employees of private institutions and the unorganised sectors. It also covers the Atal Pension Yojana.
Contractor also said that pension is one of the prime needs in this country, as almost 90 per cent of the workforce is in the informal sector.

"The organised sector are only 10-11 per cent. They are well covered by the pension schemes, but in the informal sector the coverage is very very scanty.
"So these government social sector schemes, of which pension form a very important part, are essentially formed at this informal sector," he added.