ACA-TM-37 (v2.2-20-Nov-10 ) 1 Relation Building with rural borrowers – Key to Business strategy S...
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ACA-TM-37 (v2.2-20- Nov-10 1 Relation Building with rural borrowers – Key to Business strategy S Thomas Punnoose Member of Faculty, CAB, RBI, Pune 11-04-2013
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Transcript of ACA-TM-37 (v2.2-20-Nov-10 ) 1 Relation Building with rural borrowers – Key to Business strategy S...
ACA-TM-37 (v2.2-20-Nov-10) 1
Relation Building with rural borrowers – Key to Business strategy
S Thomas PunnooseMember of Faculty, CAB, RBI, Pune
11-04-2013
ACA-TM-37 (v2.2-20-Nov-10) 3
Inclusive Growth:Inclusive growth as a strategy of economic development has received renewed attention in recent years owing to rising concerns that the benefits of economic growth have not been equitably shared.
Growth is inclusive when there is equality of economic opportunities.
Financial inclusion makes growth broad based and sustainable by progressively encompassing the hitherto excluded population.
ACA-TM-37 (v2.2-20-Nov-10)
Financial Inclusion and Financial Literacy
4
SUPPLY SIDE
DEMAND SIDE
ACA-TM-37 (v2.2-20-Nov-10)
Customer Relationship Management
• A customer service approach that focuses on building long-term and sustainable customer relationships that add value both for the customer and the company
ACA-TM-37 (v2.2-20-Nov-10)
3 Important Points
• The Most Important Goal is – CREATE & KEEP THE CUSTOMER
• Not To sell – Help Them To buy
• People love to buy – Hate to be sold
ACA-TM-37 (v2.2-20-Nov-10)
Top 20% contributed to 150% profit, while the worst 40% results in 50% profit reduction
Customer segments
Pro
fit
1 2 3 4 5 6 7 8 9 10
Twice the normal
turnover
50% profit reduction
Why CRM ?
ACA-TM-37 (v2.2-20-Nov-10)
Present a single face to the customer
Customer focus
Customer focus win and retain loyal and profitable customers
ACA-TM-37 (v2.2-20-Nov-10)
Advantages of customer focus
• Accurate view of internal operations• Service to customers
– Information• Across product lines• Across geographic locations• Across subsidiaries, business units• Across multiple channels
ACA-TM-37 (v2.2-20-Nov-10)
• Acquisition costs incurred once only• Benefits accrue from
– Loyal customers referring other new customers– Loyal customers tend to purchase more over time– Loyal customers are less price sensitive– Loyal customers incur fewer administrative costs over time
Why are loyal customers more profitable?
ACA-TM-37 (v2.2-20-Nov-10)
The customer perception• Keys to shaping customer perception
– Develop customer profile– Look at your business with customer eyes– Be aware of over promising– Do not cheat your customer - Just to sell the Product – Your Image – Representing Your company – Problem – great opportunity to win a customer
ACA-TM-37 (v2.2-20-Nov-10)
Important Points:
• BE RELIABLE- consistent performance is what customer wants from us
• BE CREDIBLE- if the customer buy the product, he wants to safe and guaranteed.
• BE ATTRACTIVE- body language• BE RESPONSIVE– accessible, available and willing to
help customer whenever the customer has a problem.
• BE EMPATHETIC- to be in customer’s shoes and grasp his point of view
ACA-TM-37 (v2.2-20-Nov-10) 15
Some facts: Particulars (as on December 31, 2012) Status
Number of Bank Branches 103359
Number of Rural Branches 39127
Banking Outlets in villages 211234
Basic Savings Bank Deposit Accounts (No. in million) 171.43
Overdraft Facility in BSBDA (No. in million) 3.28
BSBDA through ICT – BCs (No. in million) 72.41
ICT – BC – Total Transactions (No. in million) 60.48
ACA-TM-37 (v2.2-20-Nov-10)
Financial inclusion broadly refers to theprocess of ensuring access to appropriate financial products and services needed by all sections of the society in general, and vulnerable groups such as the weaker sections and low income groups in particular, at an affordable cost, in a fair and transparent manner by mainstream institutional players.
16
What is Financial Inclusion?
ACA-TM-37 (v2.2-20-Nov-10) 17
Perceptions about Financial Inclusion
• A potentially viable business proposition
• Money at the bottom of the pyramid
• It seeks to bring into the fold of banking services a
huge untapped market
ACA-TM-37 (v2.2-20-Nov-10) 19
Financial Needs: Savings, Credit
Credit,Cash Management, Insurance
Remittances
Asset/illness/death insurance
Short/Long term credit facilities or savings services
Savings, simple pension products
ACA-TM-37 (v2.2-20-Nov-10) 20
Outcomes:
• Enhanced ability to manage planned financial needs
• Enhanced household capacity to manage shocks and
vulnerabilities
• Improved social, educational and financial status
The “unbanked” need and use a range of financial services (not
just credit) and are willing to pay the “right” fee for these services
ACA-TM-37 (v2.2-20-Nov-10) 21
High-income savvy customers graduating to a mobile life
The poor cherish the most basic features
ACA-TM-37 (v2.2-20-Nov-10) 22
Poor people make decisions on the basis of 4 variables:
So the poor want…….• Frequent opportunities to transact• Small amounts in • Conveniently located outlets of • Trustworthy / secure institutions
ACA-TM-37 (v2.2-20-Nov-10) 23
Factors that determine demand for services:
• Migration of poor to urban environments –
remittance
• Dependence on weather, rainfall, landholding,
market-demand influence financial needs – credit or
insurance
• Accessing State benefits
ACA-TM-37 (v2.2-20-Nov-10) 27
Supply side enablers:
Multiple Technology options available today hold the promise of supporting FI at large scale
ACA-TM-37 (v2.2-20-Nov-10) 28
Success stories – low value high volume goods:
ACA-TM-37 (v2.2-20-Nov-10) 29
Success stories – low value high volume goods:
• Industries falling in the value-chain (buyers to sellers)
of agro-sector
• Mobile operators developing paper vouchers of very
small denominations and subsequently electronic
airtime top-up of any-value, providing the flexibility
of paying for mobile services as per cash at disposal
ACA-TM-37 (v2.2-20-Nov-10) 30
Cost-effective & sustainable distribution of services
ACA-TM-37 (v2.2-20-Nov-10) 32
What is Financial Literacy?
• The capacity to have familiarity with and understanding of financial market products, especially rewards and risks in order to make informed choices
• It refers to the ability to make informed judgments and to take effective decisions regarding the use and management of money
• Lack of FL is a major impediment in the process of FI
ACA-TM-37 (v2.2-20-Nov-10) 33
Scaling up Financial Literacy efforts:
• FLCs and all rural branches to conduct outdoor FL Camps at
least once a month
• FL efforts to be reviewed in SLBC / DLCC meetings
• Bank’s HO to review effectiveness of FL efforts
• Bank’s Top Management to ensure that all rural branches and
FLCs prepare a calendar for conduct of camps in the
beginning of the year
• Ultimate objective is to make FI a viable business model by
capturing untapped business opportunities
ACA-TM-37 (v2.2-20-Nov-10) 34
Focus on:
• Recognizing the actual objective i.e. behavioral and attitudinal
change
• Organize meetings of the financially excluded with the
financially included and have honest discussions about what,
why and how – both how difficult and how easy – of financial
products already being used by people who were until
recently financially excluded will provide large dividends
• Repetitive messages in an environment they are comfortable
with – peer learning is most effective in a group mode
ACA-TM-37 (v2.2-20-Nov-10) 35
Conduct of Financial Literacy Camps:
• Programme to be conducted in three stages to be spread over
a period of three months, comprising of three sessions of
minimum two hours each
• 1st session: creating awareness on financial concepts
• 2nd session: (a fortnight after 1st session):
• 3rd session: (2 months after holding of 2nd session)
ACA-TM-37 (v2.2-20-Nov-10) 37
Introduction:
• 43 districts identified (on the basis of higher Aadhar
enrolment figures) in 16 States / UT
• 26 schemes selected on the basis of higher incidence of
beneficiaries with bank accounts and where flow of funds
were found to be relatively simpler
• 26 Public Sector Banks, 12 RRBs and few Private Sector and
Cooperative Banks are on board for roll out of DBT
ACA-TM-37 (v2.2-20-Nov-10) 38
Direct Benefit Transfers:
• Are programs that transfer cash directly, generally to poor
households, with or without conditions. The purpose could be:
ACA-TM-37 (v2.2-20-Nov-10) 39
DBT Objectives:
• DBT envisages a switch from the present electronic transfer of
benefits to bank accounts of the beneficiary to transfer of
benefits directly to Aadhaar seeded bank accounts of the
beneficiaries.
• The other objectives are:– Accurate Targeting– De-duplication– Reduction of Fraud– Process Re-engineering of Schemes for simpler flow of information and
funds– Greater Accountability
ACA-TM-37 (v2.2-20-Nov-10) 40
26 Schemes implemented for DBT: Ministry No of
SchemesName of the Scheme Funds Flow
M/o Social Justice and Empowerment 7
Post-Matric Scholarship for SC Students
MSJE to State Government to District
to Beneficiaries
Pre-Matric Scholarship for SC Students
Pre-Matric Scholarship for children of those engaged in unclean occupations
Upgradation of merit of SC Students
National Overseas Scholarship Schemes for Sc Students To MEA
Post-Matric Scholarship for OBCs MSJE to State Govt to District to Beneficiaries
Top Class Education Scheme
M/o Human Resources Development, D/o Higher
Education3
Scholarship to Universities / College students MHRD to Beneficiary through Canara Bank
Fellowship Schemes of UGC MHRD -UGC Beneficiary through Canara Bank
Fellowship Schemes of AICTE MHRD-AICTE-Institution - Beneficiary
M/o Human Resources Development, D/o School
Education & Literacy2
National means cum Merit Scholarship SBI – Beneficiary Acs
National Scheme for Incentive for the girl child for secondary education
Canara Bank – Beneficiary Acs
ACA-TM-37 (v2.2-20-Nov-10) 41
26 Schemes implemented for DBT: Ministry No of
SchemesName of the Scheme
M/o Tribal Affairs 3
Post-Matric Scholarship Schemes for ST students
Top Class Education System
Rajiv Gandhi National Fellowship
M/o Minority Affairs 3
Matric Scholarship Scheme
Maulana Azad National Fellowship
Merit cum Means Scholarship Scheme
M/o Women and Child Development 2
Indira Gandhi Matritya Sahyog Yojana
Dhanalakshmi Scheme
M/o Health and Family Welfare 1 Janani Suraksha Yojana
M/o Labour and Employment 5
Scholarship for children of Beedi workers
Housing subsidy to Beedi workers
Stipend to children in special schools under the Child Labour Project
Stipend to trainees under Scheme of Welfare of SC/ST job seekers through coaching Guidance and Vocational Training
Stipend to trainees under Scheme of Skill Development in 34 districts affected by Left Wing Extremism
