From Social Banking to Financial Inclusion: Understanding the Potential for Financial Services Innovation in India

When it comes to savings for the poor and financial inclusion efforts, India is a dynamic market ripe for innovation and experimentation. Its extensive web of financial service providers as well as the incidence of large-scale exclusion are contradictory features that also make it a market worth examining.

This extensive report features original data and research to identify innovative efforts and challenges faced by the Indian government and private sector to provide poor citizens access to financial services as well as recommendations on what steps should be taken next. According to new data on 146 savings products and interviews with almost 30 of India’s leading financial institutions, the report concludes that the financial sector should:

  • Move beyond just financial access and toward developing savings accounts that, according to market research, the poor have a demonstrated desire for;
  • Give incentives to financial institutions to promote low-income focused accounts;
  • Link to ongoing government initiatives such as biometric identification, government-to-person payments, and electronic banking channels.

More can be done for the 65% of adults across who do not have access to formal finances, and this reports calls for a fundamental shift in thinking that focuses the sector more on short-term sustainability and better understanding the value in banking the poor.

This report was made possible by support from the Bill & Melinda Gates Foundation. It is the third exploratory savings landscape country study conducted by the Savings for the Poor Innovation and Knowledge Network (SPINNAKER). The goal of the study was to not only capture the range of savings products for the poor and identify opportunities for further innovative development, but also to help develop data gathering instruments and approaches and identify gaps for future research. In summary, the research objectives of the study were the following:

  • To understand the savings landscape in India in the context of the diversity of financial institutions serving the poor;
  • To identify innovative products and delivery channels and understand what features make a product accessible and attractive to low-income households;
  • To draw lessons from the financial inclusion campaign of the Reserve Bank of India (RBI) and the Indian government and the impact that this has had on access to savings.

To read the full report, please click here.




Anjana Ravi
Eric Tyler
Sunil Bhat
Minakshi Ramji