DFS can expand the delivery of basic financial services to the low income segments through innovative technologies such as mobile-enabled solutions, electronic money models and digital payment platforms. The move to ‘Digital’ transactions, therefore, is being seen to benefit not only the low-income clients but also the economy at large by lowering of costs. And with demonetization, the government’s recent push to replace cash with digital payments and a gradually improving payments infrastructure, the time is right for transitioning low-income clients from cash to digital payments channels.

However, the awareness and adoption of DFS is quite low among the low income segments. Grameen’s global research uncovered that low income segments households do not alone have the financial capability to independently use digital financial services; contextual information and training on transactions is also needed. GFI believes that sharing field insights collected through our research in the last year can contribute to the policy discourse and aid the practitioners to enable the MFI clients to participate in the digital economy. The current landscape of rural Uttar Pradesh and the MFI clients is quite exciting and dynamic. CISP’s research from rural Uttar Pradesh from the pre-demonetization days gives us the following insights:

• 89{2382e02857292b6eafd237571e3abe7645aa48c6a9d39376bdebe696ef57ad7b} of the women clients surveyed have a bank account, and at the household level bank account coverage was at 97{2382e02857292b6eafd237571e3abe7645aa48c6a9d39376bdebe696ef57ad7b}
• Only about 37{2382e02857292b6eafd237571e3abe7645aa48c6a9d39376bdebe696ef57ad7b} of rural women surveyed own personal mobile phones and form one of the key segments to further digital financial inclusion in India but their phone usage is restricted to receiving phone calls
• Only 18{2382e02857292b6eafd237571e3abe7645aa48c6a9d39376bdebe696ef57ad7b} of accounts are linked to mobile phones

The Client Ecosystem_31.03_GFI_CISP