Overview

Grameen Foundation Social Impact (GFSI) in partnership with Citicorp Finance (India) Ltd.  and National Payments Corporation of India (NPCI) recently launched itsDIvE (Digital Inclusion via Education) program in Nagpur, an Indian city in the state of Maharasthra, to develop the financial education model, with a strong emphasis on digital payment solutions.

It is being piloted in the Indian state of Maharashtra, where the partners will educate 200,000 beneficiaries over an 18-month period.  DIvE incorporates both face-to-face training and digital tools such as Interactive Voice Response messaging.

The program aims at significantly improving the digital financial literacy levels of low-income individuals, in order to improve their access to and usage of digital channels. The program will leverage GFI’s on-the-ground experience in enabling low-income households to use digital channels. It aims at training youth and women from the low-income communities, in various age groups for training in digital financial literacy.

While infrastructure is gradually getting into place, the financial and digital literacy levels of users are still low income segments in India. A World Bank report^[1] says Financial Literacy can encompass concepts ranging from financial awareness and knowledge, including of financial products, institutions, and concepts; financial skills; and financial capability more generally, in terms of money management and financial planning.

According to S&P’s Ratings Services Global Financial Literacy Survey released in 2015, close to 76{bfd0b5b52bb77a6f8ada0901106534875092d790f4bffd43f90a9d1e4335d035} Indian adults do not adequately understand key financial concepts. This low level of awareness translates into low transaction volumes through mobile phones.

Research indicates that low income segments households do not have the necessary contextual information nor access to the training needed to independently use digital financial services for their benefit. Financial education, especially of the low- and medium-income groups, is important as research indicates that low levels of financial literacy are associated with and often causes adverse financial outcomes.

Looking at the strong need for creating awareness about the DFS platform among the users, stakeholders in the digital finance space, including the Reserve Bank of India, public and private sector banks, non-governmental organizations, and other financial service providers are making an attempt to educate users about these platforms.

There is, however, no financial education model that is replicable or scalable on a large scale. As a result, financial education is mostly left to individual banks/financial institutions to create some awareness about digital financial services in their areas of operation. Weak financial and digital capability results in sub-optimal uptake and usage of digital finance. Potential benefits of a robust digital finance ecosystem are therefore not fully actualized by a large majority. There is, thus, a strong need to create a financial education model that can be adopted by various stakeholders and can be scaled up to improve the overall levels of financial literacy in the country.

The other distinctive thing about the project is to deploy Grameen’s three-touch model of Access- Uptake- Adoption to achieve behavior change among the target communities.

The new grant builds on prior work funded by Citi Foundation, which included the development of a digital payments system for low-income rural women, and a digital financial services and financial education initiative that is slated to reach more than 58,684 women in Uttar Pradesh, one of the low income segmentsest states of India.

From February 2018 onwards, GFSI and its partners will reach out to youth in the villages to impart information on usage of Rupaydebit cards, Aadhar Enabled Payment System and mobile applications like USSD, UPI and BHIM to encourage seamless transactions.

In reaching an additional 200,000 people, the DIvE project will also contribute to Grameen Foundation’s overarching goal of reaching 25 million people by 2025 with innovations that measurably improve their lives.

Target segments

The program will target three distinct beneficiary segments – women and men (largely in the 25 to 60 years age group) and youth (16 to 25 years) and will employ distinct outreach and engagement strategies for each segment. This will help ascertain the optimum combination of technology and human interface-based approaches that are most effective and scalable in reaching these population segments.

Programmatic approach

The program will leverage both human interface as well as technology-enabled training solutions to ensure behavior change of target beneficiaries from largely cash-based to a cash-lite way of life. The program will use scalable technologies such as IVR (interactive voice response) that can be key to large scale replication in the post program phase. This program will work as a blueprint for other organizations to replicate in other parts of the country and potentially introduce digital finance to millions of people.

Effectiveness and scalability of this program will be key it its wider adoption. Towards this objective, GFSI will act as a technical resource partner and lead implementation agency, whereas NPCI, will play a key role helping gather useful data from the back-end on the adoption and usage, and also be represented on the project steering committee.

Related Information

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