There is an abysmal lack of formal banking and credit facilities in rural India. In the recent past, the Indian government has laid increased emphasis on universal financial access to all citizens and ‘financial inclusion’ is the new buzzword.

The best gauge to assess the degree of ‘financial inclusion’ in a nation is by the proportion of families with a bank account. Of the 600,000 villages in India, only 9,000 villages have more than one bank branch. Less than 2 per cent of rural households can access loans from a financial intermediary to meet unforeseen financial expenses and the approval for such loans takes anywhere between three and six months.

Banking growth has been restricted in rural India because a large part of the population is still steeped in poverty and falls under the ‘informal’ sector. Moneylenders remain a strong presence in rural India, delivering finance to the poor on terms of extortion (interest rates vary from 48-120%). From the banks’ perspective, serving the rural poor is a high-risk, high-cost proposition, with great uncertainty, elevated transaction costs related to small loan size and frequent transactions. From the rural borrower’s perspective, banks do not provide conveniently accessible and flexible products and services. They involve lofty transactions cost, cumbersome procedures and a long processing time.

At Comat, ‘financial inclusion’ of the vast sections of disadvantaged and low-income groups assumes paramount importance. Indeed, we believe that promoting ‘financial inclusion’ forms an integral part of a wider drive towards social inclusion. We see this as an explicit strategy for fostering faster economic growth. We are steadfast in our commitment of ‘banking the unbanked’ and we offer banking and financial services at our well-networked Rural Business Centers (RBCs).

The Comat Banking & Finance Solution

As Business Facilitator and Business Correspondent, Comat has entered into collaborations with State Bank of India, India’s largest public sector bank and ICICI, India’s largest private sector to reach rural pockets of the country. We undertake training and promotion of personnel at our RBCs, equipping them with training on basic banking concepts, sourcing loan applications, developing sales tool kits, conducting targeted selling and other promotional activities.

It is our objective to provide comprehensive financial solutions through a holistic set of services encompassing regular forms of financial intermediation, such as a basic no-frills banking account for making and receiving payments, a savings product suited to the pattern of cash flows of a poor household, money transfer facilities, small loans and overdrafts for productive, personal and other purposes etc.

With a focused effort, we plan to bring close to 1 million people within the formal financial net.