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The inclusion triangle

September 07, 2014

Abstract: The prospects of the Jan Dhan Yojana (JDY) have been assessed via an “inclusion triangle” consisting of product, delivery and awareness.

Product refers to customized and affordable financial products — savings, credit, insurance and pensions—to achieve meaningful financial inclusion amongst participants (account holders).

Delivery focuses on the issue of who bears the risk, particularly as a number of different channels are involved. Mechanisms must be created to allow for smooth risk transfers across institutions; here, securitization may provide a possible solution. Payment banks could possibly act as the last-mile agents to identify and service customers for various credit and insurance products.

Awareness refers to the need to support the rollout of the JDY with clear messages on the benefits of various products and their affordability.

For JDY to be effective, products, delivery and awareness need to be carefully crafted.

Keywords: Jan Dhan Yojana; insurance; pensions; overdraft facility; payment bank

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