Digital financial inclusion in rural India

India has seen a vast growth in digital and financial inclusion in recent years. Today there are around 493 million active internet users in the country out of which 200 million are in rural India (Economic Times). Around 80% of adults now have bank accounts compared to a mere 35% in 2011.

In spite of this progress, digital and financial inclusion will be unfulfilled until rural areas are provided with proper infrastructure and access to basic banking facilities and awareness regarding schemes that are available to people in these regions.

Challenges in digital financial inclusion:

• Digital divide caused by poor connectivity is one of the major roadblocks in using financial services in rural India. 
• The digital banking which is extremely popular in urban India has failed to pick up pace in rural India. Digital literacy is one of the reasons for this.
• Most banking websites and applications offer services in English. People in rural areas are more comfortable in their regional language.
• The other reason being fear of online transactions owing to number of cyber-attacks.
•  Limited physical infrastructure, transport facility, adequately trained staff are also other hindrances faced.
• There are very few players in the financial services market and thus limited competition.

Opportunities for digital financial inclusion:

• The governments Bharat.Net project which aims to provide broadband to all 2,50,000 gram panchayats in the country will definitely boost the digital inclusion in rural India.
• Focusing on regional languages in banking applications and websites can boost digital inclusion in rural areas.
• Improving infrastructure and transport system in rural areas will definitely promote digital inclusion.
• RBI has suggested having more market players to promote innovation and competition and to minimize concentration risk in the retail payment system from a financial stability perspective.
• Raising financial literacy by the Panchayat Raj Institutions which have wide coverage should make people aware of various schemes like like Atal Pension Yojana, Direct Benefit Transfers and other insurance schemes which are available to them.
• A proper Business Component Model enabling financial inclusion by reaching even the remotest of villages is crucial. A better push from the government to support this by providing better incentives and dedicated schemes will be necessary.

Disability Entrepreneurship And Leadership (DEAL) Foundation is working with Karnataka Vikas Grameena Bank to extend financial inclusion services to 3000 households of people with disabilities in Gadag district through its Sustainable Rural Livelihoods Programme. This will help address the last mile connectivity issues and provide easy access to finance to households of people with disabilities thereby supporting enterprise development and creation of livelihoods.