Swati Yashwant, a 29-year-old mother of one, is part of a growing legion of roving tellers intent on providing bank accounts to the nearly 50 percent of India’s 300 million households that do not have them. Using a laptop computer, wireless modem and fingerprint scanner, Ms. Yashwant opens accounts, takes deposits and processes money transfers for farmers and migrant workers in this small town 70 miles south of Mumbai, India’s financial capital.
To reduce the risk of robbery or theft, no transaction by law may exceed 10,000 rupees (about $212). And in practice, many amount to no more than a dollar or two. But with the bulk of India’s population living in villages that have never had a bank branch, Ms. Yashwant, with her electronic devices, is a missionary of financial modernity.
Many Indians “don’t know anything about banking,” she said in her small office here, which is decorated with a garlanded picture of Ganesh, the Hindu god believed to remove obstacles. “I want to open their accounts and help them understand banking.”
Economists and policy makers say mobile agents like Ms. Yashwant — who also are employed in countries like Brazil, Mexico and Kenya — represent one of the most promising ways to help the rural poor save and protect their money. Many people in India who do not have bank accounts, for instance, buy gold necklaces or simply keep cash in their unlocked homes.
“This is something that could be powerful,” said Abhijit V. Banerjee, an economist at the Massachusetts Institute of Technology who wrote “Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty” with Esther Duflo.
The banking agents enable the poor to easily save money they otherwise might be tempted to spend, Mr. Banerjee said. And when times are lean, people could withdraw money they had saved, instead of borrowing cash at high rates of interest.
The accounts earn currently earn 4 percent annual interest, which is standard for savings accounts in India. There are no maintenance fees, or charges for deposits or withdrawals.
“It’s true that this will not make them rich,” Mr. Banerjee said, “but it will make them less likely to face starvation someday.”
Ms. Yashwant is one of an estimated 60,000 of what Indian bankers call “business correspondents,” who are not bank employees but earn commissions that the banks pay them for each transaction.
The Reserve Bank of India, the country’s central bank, began the push for banking correspondents about five years ago. After slow initial growth, the central bank predicts the ranks of correspondents will more than double, to 126,000, by March. The Reserve Bank has ordered commercial banks to set up correspondents in every village with more than 2,000 people and has assigned each of those villages to one bank or another.
For India’s banks, it is a relatively inexpensive way to recruit customers. While about 70 percent of India’s population is dispersed among more than 600,000 villages, the entire country has only 33,500 bank branches. Correspondents like Ms. Yashwant have set up 74 million bank accounts in India.
“If you used the traditional high-cost banking system, you will never reach these people,” said Jayant Sinha, who is managing director of the India office of Omidyar Network, a philanthropic investment firm set up by Pierre M. Omidyar, the founder of eBay.
Ms. Yashwant has been a correspondent in Kolad for four months, for State Bank, India’s biggest bank. The $200 or so she earns in an average month is a good wage in rural India, where the average monthly income is only about $65.
Article source: http://feeds.nytimes.com/click.phdo?i=3a4c02fe0547cc52a86cb95342c6ad1a
Speak Your Mind
You must be logged in to post a comment.