IT has revolutionised the entire world. Banking sector has also been revolutionised by this IT revolution. Gone are the days when you had to stand in the queue in a bank to get your cheques cleared, or stand in a queue to pay your Electricity bills and fight with a Bill collecting clerk at BSNL office. Internet has revolutionised the way users use to do their daily businesses. It had made it easy to shop and avail services like internet banking from anywhere, anytime without physical presence.
“Banking the unbanked” is the topic that I first heard during Davos 2007 media reports. There are hundreds of reasons for large part of population in many countries – developed, developing and underdeveloped – to stay outside the realms of banking. The reasons vary from logistics to cost of transactions, lack of financial literacy and products that meet the requirements of the unbanked people. The major reasons for the lack of credit available in the less developed part of the world are pretty self-explanatory. Most of the unbanked population is poor, they represent a higher risk and lower return on investment for banks and financial institutions, and as a result, they’re reluctant to get involved in these regions.