Grameen Foundation and MetLife Foundation are partnering to advance financial inclusion in India. This new initiative is designed to leverage the combined strengths of commercial banks and local, trusted field-based organizations to create sustainable and viable banking services for the poor. The programme will be executed over the next two years by Grameen Foundation India (GFI), a wholly-owned subsidiary of Grameen Foundation. GFI will help an Indian microfinance institution, Margdarshak, transform itself from an organization focused on credit alone into a sustainable and scalable business correspondent (BC) of a commercial bank. Margdarshak will act as an agent for the bank, enabling it to provide savings and other services to at least 40,000 poor, women clients in the northern state of Uttar Pradesh.
Last August, the new government launched the Pradhan Mantri Jan Dhan Yojana scheme, signaling its focus on financial inclusion. The program has already provided bank accounts to 110 million households that previously had no access to formal financial services. A recent directive to integrate this scheme with India’s biometric identity platform, Aadhar, will significantly enhance the scale and efficiency of this initiative.
“Given the evolution of the business correspondent space in India and concurrent developments in the microfinance industry post the Andhra Pradesh crisis, we believe that it is an opportune time for microfinance institutions to adopt this channel for their growth and sustainability,”said Tarun Chug, Managing Director & CEO of MetLife India. “We are excited to partner with Grameen Foundation to further this agenda by showcasing a viable, sustainable and replicable business model based on the business correspondent delivery channel. We expect that such a business model will provide a wide array of appropriate and affordable financial services to low-income households, and contribute to the larger financial inclusion goals of MetLife Foundation,” he said.
“MetLife Foundation has demonstrated its firm commitment to strengthening financial inclusion in India by supporting several financial inclusion initiatives since 2013. We are pleased that it is now supporting our goal to strengthen the business correspondent model, which can play a huge role in addressing challenges in access to financial services and facilitate the success of India’s ambitious financial inclusion agenda,” said Chandni Ohri, CEO of Grameen Foundation India.
Drawing on its extensive experience in launching and scaling similar channel innovations, GFI will work with Margdarshak to strengthen their institutional capacity specifically around change leadership, business process management as well as IT solutions and generating client level insights.
Through this project, Grameen Foundation and MetLife Foundation aim to encourage more commercial banks and microfinance institutions to partner through the business correspondent channel, and ultimately deliver on its promise.