Sa-Dhan, HSBC Bank ink pact to create digital eco for MFIs

The association of community development finance institutions Sa-Dhan and HSBC Bank today entered into an agreement to create a digital ecosystem for the unbanked segment in the country.
HSBC Bank is to provide technology expertise to train and educate micro-finance consumers at grass-root level and introduce digital banking.
A pilot will be undertaken in the current fiscal that will be spread across four zones, Sa-Dhan said in a release.
It has to be undertaken in West Bengal, Punjab, Karnataka and Maharashtra that is expected to benefit 1,200 consumers.
P Satish, Executive Director, Sa-Dhan, said the pilot project will provide it a path to empower MFI clients and further ensure spread of knowledge and adaptability faster.

"The pilot will be creating digital hubs with POS machines and internet connectivity. It has been observed that for rural MFI clients, the nearest bank branch is on an average at a distance of about 7 km," he said during the Sa- Dhan National Conference 2017 here today.

NABARD Chairman Harsh Kumar Bhanwala said India is still grappling with challenges of financial education for the underserved but have to take up the challenge of imparting technology education.
"To further financial inclusion, it is imperative to educate MFIs for last mile connectivity," Bhanwala said.
Citing recent research, Sa-Dhan said product awareness, digital literacy and trust are the main challenges for rural populations, followed by lack of Internet and smart-phone penetration and customised products.

Challenge recognition, the digital financial inclusion mandate and maintaining human touch through customer service points has great potential to facilitate inclusion, the reports suggest.