Financial inclusion in India's financial capital, Mumbai
The Indian nation is determined to meet its goal on financial inclusion. How financially inclusive is the city of Mumbai?
As the financial capital of the country, Mumbai, with a population of 18.8 million, has more than 1,600 bank branches. But when it comes to the poor and informal sector workforce, let's see how it fares.
Pretty comparable relative to other Indian cities but still poor for meeting any reasonable benchmarks on inclusion in a country where over 50% of urban poor still remain unbanked. Mumbai has only 4 Micro Finance Institutions (MFIs) that are currently lending to about 50,000 people. As regulation does not permit MFIs to accept savings, Business Correspondents (BCs) provide the network link to an existing bank branch network. But despite over 1600 number of bank branches in Mumbai, there were only 131 BCs operating in the Thane District of Greater Mumbai.
For a comparison, a much small neighboring city of Pune has a larger number MFIs (6), over 80,000 loans and over 276 Business Correspondents (BCs) that bring financial services to customers.
Take a look at the financial inclusion map of India recently launched by the MIX markets and supported by the Citi Foundation. As is visually clear, financial inclusion efforts have been largely aimed at rural India. What can be done to enhance financial inclusion in Mumbai and other Indian cities? What are the range of financial service needs of the urban poor? And how can we create a responsible financial inclusion agenda for the nation by ensuring it go hand in hand with improved financial literacy?