Case Study in Focus

FINO PAY TECH LTD: BRANCHLESS BANKING FOR THE RURAL POOR
 

Despite the combined presence of state owned banks and private banks in India, and considerable pressure from the central bank to extend financial inclusion, the fact remains that the majority of the Indian population remains unbanked. To meet the challenge, the Reserve Bank of India in 2006 decided to allow the use of agents to represent banks, and information and communications technology in the form of branchless banking. The model is expected to serve the “bottom of the pyramid”, in India’s case, some 400 million people living in rural villages, 95% of whom had never had a bank account. Technology-based Business Correspondents were allowed to work in close association with banks. This case presents FINO’s technology-based model for financial inclusion, and the challenges presented to Mr. Manoj Deshpande, the Kohlapur District Coordinator as he starts the process of building the local organization.

 


 



Abstract of the case:
The urgency of financial inclusion had been well-recognized by policy makers, the government, the Reserve Bank of India and banks as a national priority that would play a crucial role in promoting inclusive economic growth. New technology could enable innovative sustainable business models to reach previously excluded customers. This case presents FINO’s technology-based model for financial inclusion and the challenges presented to the Kohlapur district coordinator as he starts the process of building the local organisation.

 

Learning Objective:
  • To outline the causes and consequences of financial exclusion.

  • To describe various models adopted by players using new technologies.

  • To evaluate the sustainability of the FINO model.

  • To evaluate the competitive environment for FINO, and to discuss the challenges faced in the Kolhapur district.

  • To prepare a business plan for the launch of FINO operations.

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    This case study has been developed under the aegis of the Centre for Learning and Management Practice at the Indian School of Business, and published as an ISB-Ivey co-branded case, distributed through Ivey Publishing.