HSBC will tie-up with Sa-Dhan, the microfinance industry association, to create a digital ecosystem for the microfinance sector that caters to the bottom-of-the-pyramid customer. HSBC will offer technological expertise to educate microfinance consumers and introduce digital banking into the workflow. This is expected to improve the efficiency of banking processes and financial transactions.
It was found that for a rural customer, the nearest bank would be at an average distance of 7km from his/her place of residence.
P Satish, the executive director at Sa-Dhan stated that the pilot with HSBC will provide a channel to empower clients of microfinance institutions (MFIs) and render the microfinance sector cashless. HSBC targets to run a pilot in Punjab, West Bengal, Karnataka, and Maharashtra, and it is expected to help 1,200 consumers. The pilot run will create digital hubs with internet connection and point of sale terminals.
Satish also mentioned that the formulation of a robust ecosystem will be effective only when clients become aware of the existing banking practices. Hence, facilitation of ground training will ensure knowledge transfer and adaptability at a quick pace.
The chairman of the National Bank for Agriculture & Rural Development, Harsh Kumar Bhanwala, said that they are still imparting financial education to the underserved, and would take up the challenge of technology education as well.