GANASEVA:BRANCHLESS REMOTE BANKING MULTI-SERVICE DELIVERY MODEL FOR REACHING THE RURAL PEOPLE By Dr S S Satchidananda Ph.D., Head, Risk Solutions and Research Financial Services Sector IBM India, Bangalore
OUTLINE • Integrated Approach for Rural Services Delivery • Establishing DIGITAL Rural Information Infrastructure • Banking & Services Delivery Model
Current Scenario • Plethora of rural technology initiatives • Concerns: • Well intentioned attempts with un-established relevance • Incomplete / Partial solutions • Insufficient BPR and mere “ mechanization”s • ICT as an embellishment- peripheral / PR exercise • Increase in Access difficulties ,Transaction cost, • Taking Technology to People rather than taking service to the people.
IRCS DRIVERS • New Wealth generation thru new investment, trade and commerce enabled by ICT • Commercial gains thru market enlargement and growth • Economic integration of the Rural and the Urban areas & overall welfare improvements • Development as business
INTEGRATED FRAME WORK • Banking service delivery as the core function • Utility service provision as second layer • Other services as outer layer: governance information, education, health • Entrepreneur- based operations: • Private initiatives or PPP initiatives • Immense potential for innovation
TECHNOLOGY ELEMENTS • Online Transaction Processing Electronic platform • Utility services Applications • Information services Applications • Applications for other services
WHY BANKING SERVICES AS THE CORE? • Need for money for carrying on livelihoods • Need for increasing capital formation in rural areas • Need for Banks to broadbase their portfolio • Payment system infrastructure • Supply leading role of banking in development.
MULTIPLE DEPLOYMENT STRATEGIES • Computerization of operations of existing entities • Use of Technology- enabled, appropriate delivery channels: • Cyber Kiosks • ATMs • Mobile ATMs • Smart cards • Broad bands
MAJOR TASKS • Ensuring Financial viability • Long term sustainability • Solution development with provision for flexibility / adaptability for local needs environment and infrastructure. • Consensual & functional approach: Innovation, Commitment & Effective leadership. • Long term strategy rather than PR or Quick fix approach.
BENEFITS OF REMOTE RURAL SERVICE DELIVERY SYSTEM • Greater & faster access to high quality banking & other services • Lower transaction costs thru sharing (non-duplication + outsourcing +automation+BPM) • Lower investment cost for ecommerce • Empowerment of the rural people thru access & choice • Improvement in productivity & growth of unbanked • Comprehensive & cost effective method for delivery of banking and other services
Rural Information Infrastructure for Banking and other Services Dr. S.S. Satchidananda, Ph.D. Head, Risk Solutions & Research, FSS, IBM India, Bangalore
NEED • Collecting comprehensive data about the social and economic aspects of the 700 million rural people at the level of individuals in a self-validating and ready –to-use form • Updating the data on an ongoing basis • Managing and processing this data and for making it available to the various users
CURRENT AND POTENTIAL USERS • Commercial banks ,cooperative institutions and other rural financing agencies • Governmental authorities from village • Planning & Development Agencies • Private businesses • International agencies
SOLUTION MODEL • Use of ICT for building and operating this information infrastructure involving collection, storage updation,consolidation and processing of the data and making customised offering • Entreprenurial model with provision for assurance review by public authorities or users or both • Pay for use business model
TECHNOLOGY • PDA with Specially made Applications for Data (Voice, Picture and Data)capture,verification and validation and updation • Data Center with Technologies for storage, processing and management • Smart clients at the user-ends • Threeway CDMA connectivity
PILOT PROJECT • Project : GANASEVA RCDS • Location: IDAGUNJI • Coverage: All adults in Select Five backward villages in Interior Karnataka • User partners: Rural Financing Agencies, Syndicate Bank, SBI, PACS, Government forums
DELIVERIES • Model for Rural Information Infrastructure covering data content identification and methodolgy for validation and updating • Model for credit rating of rural individuals • ICT model for implementing the Rural Information Infrastructure • Successful demonstration of the technological feasibility • User-proofing of the Implemented Model for making loans, etc.,
“GANASEVA” TECHNOLOGY- ENABLED RURAL SERVICES SOLUTION • INTEGRATED BUSINESS SOLUTION USING TECHNOLOGIES FOR DELIVERY OF RURAL SERVICES RESEARCHED AND ARCHITECTED • SOLUTION TESTED AT HONAVAR, KARNATAKA, INDIA • FEATURES: • OPERATIONALISING OF DIGITAL RURAL INFORMATION INFRASTRUCTURE & ELECTRONIC PLATFORM FOR SHARED DELIVERY OF SERVICES • REDUCTION IN TRANSACTION COSTS & DELIVERY TIME • IMPROVEMENT IN QUALITY OF SERVICES • INCREASING AVAILABILITY AND CHOICE OF SERVICES TO 700 MILLION RURAL PEOPLE
Digital Rural Information Infrastructure Value Chain National RII Data Grid Rural Individual Information DataCollector IMDS I n c e n t i v e s Easier Access Lower Prices Increases Choice I n c e n t i v e s Job & Profits I n c e n t i v e s Profits & Growth I n c e n t i v e s Cost Savings Better Identification of Targets Better Profits Faster growth Effective delivery of services
Rural Banking Services Broker Model Bank1 Bank2 END User IMDS Entrepreneur MSDS Entrepreneur Bank3 I n c e n t i v e s Home Delivery Availability Choice of Bank Choice of Products Growth Bankn Facilitator Entrepreneur I n c e n t i v e s Cost savings Business Growth Choice of business Choice of Clientele Better Quality Assets Connectivity Providers Entrepreneur I n c e n t i v e s Profits Business Growth
SUGGESTION! • Establishing Digital Rural Information Infrastructure (DRII) for every village in India as the basis for governance, development & commerce using GANASEVA model • Issuing Smart Identity Card to every citizen based on the DRII which can be used by the person for all purposes requiring authentication • Initial application of the DRII for the providing banking ( account opening, loaning and cash at doorstep services through the coop banks & PACS using the ready-to-use solution of the GANASEVA model • Data Centre for DRII may be established using available infrastructures e.g. BSNL Exchanges / at NIC • Project can be taken up by the Private companies/ Government / on PPP model
GANASEVA- An ICT Solution for Rural Services Delivery Dr. S.S. Satchidananda, Ph.D. Head, Risk Solutions & Research, FSS, IBM India, Bangalore
Outline • Opportunity: Serving Rural India thru ICT • Problem: Inadequacies and Inefficiencies in the Delivery of financial services in rural areas • GANASEVA • Elements of the new Model • Major Tasks • Opportunities & Benefits
Current Scenario • Huge credit gaps, High transaction cost, Delays • Systemic Issues • Data Inadequacy/unavailability • Knowledge Gap about Rural People and Economy • Documentation difficulties • Bureaucratic delays • Lack of Accountability • High transaction costs • Access cost
Elements of the Model • Imaginative use of ICT services (shared information and delivery infrastructure) • Entrepreneur-based Operations (Outsourcing data collection and unbundling credit processes) • Human interface (local faciltator) • Secure, un-intimidating human-aided interface (software support) • Pro-active Delivery of Services (analytics)
End User Benefits • Better (faster, easier) and larger credit delivery to Rural India • Reduction in “Digital Divide” • Business for Banks and IT Companies • Greater rural productivity & income
MOBILE RURAL BANKING SYSTEM • IMDS • MSDS • BANKS/ NON BANKS/ SUPPLIERS • CDMA NETWORK
UNIQUE FEATURES • OUTSOURCING MODEL • ONLINE TRANSACTIONS • LEVERAGING TECHNOLOGY FOR VALUE CREATION • ENTERPRISE MODEL • NEW INSTITUTIONS LIKE RURAL CREDIT RATING • LOCAL LANGUAGE INTERFACE • VOICE SUPPORT FOR TRANSACTIONS
Summary • ICT for Rural India – an alternative solution • Common Information Infrastructure & shared delivery system • Reduction in transaction costs & delivery time • Improvement in Quality of Services • Increasing availability of services
THANKS!!! THANK YOU FOR YOUR TIME AND PATIENCE !