The PSIG programme funded by UKAid through the Department for International Development (DFID), Government of UK, was initiated to ensure that poor and vulnerable people in low income states (especially women) benefited from economic growth through better access to financial services. The programme leveraged private sector financial and technical resources to reach up to 12 million direct and indirect programme participants in 4 states of Uttar Pradesh, Madhya Pradesh, Bihar and Odisha.
ACCESS ASSIST was a consortium partner of SIDBI in the programme and was assigned the primary responsibility of policy advocacy and convergence in financial inclusion both at state and national levels. Under this responsibility, ASSIST, in consultation with SIDBI and DFID, prepared annual operating plan at the beginning year wise, which consisted of diverse activities, interventions and initiatives such as policy papers, conducting roundtables, undertaking some studies, institutional support etc. and engaged with key stakeholders at national and state level on an ongoing basis. The themes of these interventions covered a range of institutional channels including microfinance institutions, banks, business correspondents, SHGs, and programmes and services such as PMJDY, credit, insurance, pensions, financial literacy, issues of client protection etc.
ACCESS ASSIST advocated for a subcommittee on BCs in State Level Banker’s Committee (SLBC) as a recommendation of the SFIF and achieved it successfully. The Directorate of Institutional Finance of the Govt. of Odisha directed the SFIF to collect, compile and share pertinent issues affecting BC operations and share with the sub-committee for consideration.
State Financial Inclusion Forums
ACCESS Assist to bring together all stakeholders engaged in advancing financial inclusion at state level, early enough in the program period, set-up State Financial Inclusion Forums (SIFF) as a quarterly convening platform. SFIF Themes in 2015-16
Ecosystem Support to MFIs at State Level - Attracting Bank Funding for MFIs
Advocacy for greater flow of bank funding to MFIs in the PSIG focus states had been a lead theme within ASSIST’s PSIG plans the since beginning of the programme, initially in all 4 states, and from 2015 onwards, concentrated more in the two state of Odisha and Uttar Pradesh, which have a greater number of small-medium home grown MFIs.
Towards this ASSIST organises exposure visits for bank officials to MFI operations in order to educate more and more bankers about MFIs’ systems and procedures with an aim to improve funding from banks for smaller MFIs. Exposure visits were organised in Arohan and Cashpor. Separate orientation programmes for bankers on themes like MFIs appraisal and monitoring systems, digital payments, cyber security etc. have also been organized in Odisha.
Building Business Model for Comprehensive financial inclusion with Regional Rural Banks
ASSIST partnered with Bihar Gramin Bank (BGB) to roll out an Organizational Development (OD) led plan of assisting the bank for a period of two years, built capacities, developed and pilot products and processes, developed manuals and systems etc. with 10 pilot branches in Samastipur district for advancing their financial inclusion outreach. ASSIST organized a comprehensive 4 day OD exercise in February 2017 with technical support from NABARD Consultancy Services (NABCNOS) followed by business panning exercise for the pilot 10 branches to improve the performance of the RRB on FI related metrics.
Compendium - Pitchbook
A compendium of key data (Pitch-book) of MFIs operating in the four PSIG focus states were also developed by ASSIST which became instrumental in further educating the bankers about MFIs. MFI profiles provide information on products and services, promoter profile, geography covered, portfolio analysis, assessments and awards, business projections, current lenders and investors, with specific details on SIDBI loans and equity and capacity building provided under PSIG. The compendium was shared at state level by ACCESS ASSIST teams in one-on-one meetings with commercial banks, RRBs, RBI, and the SLBC convener, NABARD etc.
Financial Literacy Centres - Policy Advocacy and Capacity Building
Considering the critical importance of financial literacy in advancing financial inclusion, ASSIST pursued the theme of financial literacy in an organized manner, with focus on policy and implementation of Financial Literacy Centres (FLC) of banks.
Sensitization programmes for MFIs on Digital Payments & Cyber Security were organised by ASSIST for Odisha State Association of Financial Inclusion Institutions (OSAFII) on demand from the association and its members. The Odisha State Financial Inclusion Forum was set up by ASSIST in 2013-14 to focus on Digital Financial Inclusion themes.
Pension Literacy
ASSIST partnered with Corporate Business Correspondents (BCs) across four PSIG focus states of UP, MP, Bihar and Odisha for building their capacities on promoting Atal Pension Yojana (APY) and enrolling clients under the scheme. Promotional and educational materials including brochures, leaflets and comprehensive handbook with
updated guidelines were developed and over 400 customer service agents from the 4 partner BCs were trained on APY product and processes as well as customer education methodologies for communication among prospective clients. Mobile based audio messaging on APY was piloted in partnership with Awaaz.de via pre-recorded automated phone calls (IVR technology) among 5,000 prospective clients of the BCs. The results of this pilot were shared with PFRDA for integration within their pension awareness campaign in future.
Pilot for SHG Credit Data Reporting
A pilot on reporting of data of SHG members was undertaken in partnership with Utkal Gramin Bank and CRIF Highmark. Baseline data of 445 SHGs was collected and systems were developed for reporting of data to CRIF Highmark.
Institutionalising State Level MFI Association
ASSIST had incubated the state level association for MFIs – Odisha State Association of Financial Inclusion Institutions (OSAFII) – as a legacy institution for continued work on policy advocacy and capacity building for MFIs beyond the programme period. In 2017-18 ASSIST’s Odisha team provided hand holding support to the new association as it rolled out its operations as an independent body conducting training programmes for MFI staff, increasing its membership base and seeking funding support directly from SIDBI.
Study on Financial Inclusion in Unreached District of Malkangiri
In line with the key objective of the PSIG programme for enabling access of financial services to the poorest and most difficult regions of the country, ASSIST conducted a study on Status and Challenges of Financial Inclusion in Malkangiri region of Odisha and shared the findings with local stakeholders in a meeting of District Level Coordination Committee.
Policy Papers and Thematic Roundtables
Within the policy advocacy mandate of PSIG, ASSIST pursued the agenda of reviewing various institutional types and models that have the potential for advancing financial inclusion. In 2014 ASSIST played an instrumental role in development of the licensing guidelines for Small Finance Banks and Payments Banks by providing balanced and considered recommendations to the RBI on the draft guidelines, and through a policy paper on the status of Local Area Banks. Since the original differentiated banking category created for reaching out to the rural areas of the country was the Regional Rural Bank category, ASSIST commissioned a policy paper on Regional Rural Banks and Financial Inclusion. The report was instrumental in furthering advocacy on the contribution of RRBs to financial inclusion so far and the future prospects, particularly in the wake of the new banking categories to be set up.
In view to assess the potential and need for regulation of peer-to-peer lending model, ASSIST commissioned a status paper on Crowd-Funding in Microfinance in India: Issues, Challenges, and Opportunities. This turned out to be a timely initiative since RBI has recently released a discussion paper on Peer to Peer Lending for which the findings of the policy paper will be useful.
ASSIST also developed a status paper on Scope and Limitations for Product Development in Microfinance and Offering Diversified Products at Scale. This paper contributed to the body of knowledge on the relevance of products for the clients within the discourse on responsible finance in the MFI model.
Publications under PSIG:
Drivers of Over-indebtedness of Microfinance Borrowers in India: An In-depth Investigation of Saturated Areas (2016-2017) (https://www.accessdev.org/wp-content/uploads/2017/07/1037-1006-FILE.pdf)
The research study was conducted in partnership with IFMR LEAD with a sample of 2,000 microfinance clients across three states of Uttar Pradesh, Madhya Pradesh and Karnataka (650 in each state), with comprehensive interviews with clients as the key methodology, supported by client Focused Group Discussions and interviews with staff of MFI branch offices. The study investigated indebtedness, cases of multiple borrowings and its inter-linkages with microfinance from a two-layered perspective using quantitative, as well as qualitative data from primary and secondary sources. The research was supported by SIDBI as part of the PSIG programme.
Understanding Voices of Microfinance Clients (2016-2017) (https://development.sidbi.in/files/article/articlefiles/Voices-of-Microfinance-Clients-FINAL.pdf)
The research study was conducted in partnership with IFMR LEAD with a sample of 2,000 microfinance clients across three states of Uttar Pradesh, Madhya Pradesh and Karnataka (650 in each state), with comprehensive interviews with clients as the key methodology, supported by client Focused Group Discussions and interviews with staff of MFI branch offices. The study investigated indebtedness, cases of multiple borrowings and its inter-linkages with microfinance from a two-layered perspective using quantitative, as well as qualitative data from primary and secondary sources. The research was supported by SIDBI as part of the PSIG programme.
A qualitative study titled Voices of Microfinance Clients: Concerns, Perceptions and Delights of Microfinance Clients focused on clients perspective across different regions in the country was conducted which provided insights into both positive and negative experiences of MFI clients and provided anecdotal findings as well. The study report was released at the Inclusive Finance India Summit in December 2016 and disseminated in a separate roundtable at the event. A short video documentary film was also produced covering experiences of various clients from different states.
State of Practice of Credit- Business Correspondents (BCs) and Development of Code of Conduct for Delivery of Credit through BCs (2016-2017)
The overall objective of this initiative was to develop comprehensive standards and Code of Conduct for credit channelled by banks through BCs to poor and low income client segments to improve the state of practice on responsible finance and client protection in the BC model. The draft Code of Conduct developed through a process of consultations was released for feedback at the IFI Summit and shared with the BC Federation of India. The Code aims to help avoid the risks anticipated from issues of client protection in the absence of common standards for adherence across banks and BCs. Through the effort ASSIST has created sectoral awareness and catalyzed a discourse regarding the need for greater oversight and standards in delivery of credit through BC channel and has brought out a knowledge product in form of State of Practice report on credit-BC models which was a critical gap in available literature and research about BC operations.
