Snapshot

Company: Financial Information Network and Operations (FINO)
Project: Financial inclusion of the underprivileged
IT Head / Project Lead: Suneel Gupta, CTO

Name: Suneel Gupta
Designation: CTO, Financial Information Network and Operations (FINO)

While India's GDP has shown tremendous growth in the past decade, this growth has not reached a large segment of the population. Close to 60 percent of the Indian population (estimated to be more than 135 million households) lack access to a bank account. India stands 50th on the financial inclusion index. Financial inclusion is defined as ease of access, availability and usage of formal financial systems for all members of an economy.

Major hurdles to addressing the challenge of financial exclusion include foolproof identity, illiteracy, lack of infrastructure and accessibility in serving this 'bottom of the pyramid'segment which couldn’t attain a reach to basic banking facilities, and were deprived of any transparent trustworthy banking system.

It has been observed that banks incur heavy expenses in serving customers in remote areas, where most of these customers reside. The lower amount of money transacted by such customers results in lower productivity for bank branches. Also, high fixed and operating costs result in high delivery costs.

Financial Information Network and Operations (FINO) created a technology solution that addresses the above hurdles to create an ecosystem that can help financial institutions jumpstart the process of financial inclusion. This ecosystem does not require large capital expenditure and can be used on a pay-per-use basis.

To address the problem of illiteracy, FINO has created a fingerprint-based identity for the beneficiary. Instead of branch-based banking, a mobile ‘Point of Transaction’ (PoT) device is used to carry out banking transactions (savings account deposit/withdrawal, loan disbursal etc). FINO members carry the PoT devices to villages to facilitate banking transactions.

This approach eliminates the need to set up bank branches and the consumer need not travel to the bank. The customer’s details, including fingerprints and photograph, are captured through mobile enrolment stations that travel from one village to another. This data is brought to a central location where the fingerprints are checked (by using a biometric de-duplication check against the existing database) to verify that the customer is a unique customer.

Once biometric cards are issued to the customers, they become customers of the bank (or financial institution) and can carry out financial transactions like deposits or withdrawals. FINO's technology solution has already impacted more than 5 million lives across 166 districts of India and has provided reach into some of the toughest terrains ranging from Himachal Pradesh to the North Eastern states of India.

One of the most successful examples is the disbursement of payments by the AP Govt. for the Social Security pension scheme. Earlier, the number of un-disbursed payments under this scheme was 1,284 (in April 2008), with an un-disbursed amount of Rs 2,56,800. Post deployment of the FINO system, the number of un-disbursed payments have been brought down to 112 and un-disbursed amounts are down to Rs 22,400. This has helped Government payments to reach beneficiaries more efficiently than before.