By Raghav Prasad:
Prime Minister Narendra Modi’s maiden speech in the Lok Sabha vowed to empower the poor, and enable them to fight poverty in order to come out of it. In the Indian scenario, this imperative agenda can be met only by following the path of financial literacy — the foremost step towards financial inclusion. The financial veracities of the Indian citizens of lower-income groups such as domestic house-staff, street vendors, construction workers et al., is that there exists no place for them in the nation’s mainstream financial structure. The sad reality remains that theÂ lower strata of our societyÂ is financially illiterate and lacks mere basic financial knowledge.
My personal experience of this sorry state of affairs is of a domestic worker who was defrauded of her savings of INR 20,000 by an individual pretending to be an LIC agent. It is rather shocking to witness their naivety, which leads them to passing over hard earned cash in the hands of some fraudulent personnel making unsupported claims.
My volunteering efforts for an NGO named “Chintan” put me in contact with a host of waste-pickers. A face-to-face interaction with them exposed the harsh financial realities of the lower-income groups as well as the pressing necessity to reform their personal finance management system. To my amazement, waste pickers even older than my own parents, claimed not to have a single saved rupee after aÂ fire in their temporary accommodations.
The more I worked with these people, the more I was able to empathize with the deplorable nature of their condition. For instance, I was surprised to hear how a 26-year old rag-picker – Omar Rustam – managed his personal finances. His replies to basic questions such as “where do you keep your savings” and “how do you ensure that your money is safe?” were appalling. Having no banking habits, he told me that he stores his money at his house where he feels it is safe and hopes no one will steal it even though it has been stolen a few times in the past and once even burnt due to a fire in the slum. The desperation and the brutal exclusion of India’s poor from the mainstream financial system to the point of blind faith require an amendment, a promise which the new government stands to fulfil with some right steps taken.
I also learnt how these people are open to progressive growth. When I took the rag-pickers to the bank for getting theirÂ accounts opened, the forms and schemes interested them to the point where they demanded ATM cards. This keen interest in various bank schemes and forms showed their desire to avail financial services to make their lives better. However, the blunt apathy of the bank officials thwarted their aspirations. These officials had a very derogatory attitude towards them. They strongly felt that such people were incapable of opening and maintaining bank accounts and that these services were not meant for this stratum of society. Some openly passed statements such as, “There are no poor people in Delhi”; “Poor people do not need financial help as they are very clever”. I found this outlook of the bank officials to be exceedingly parochial and disheartening.
My observations led me to the conclusion that on one hand even if the masses do show interest and attempt to avail financial services; there are umpteen unnecessary barriers, such as the attitude of bank officials preventing them from doingÂ so. As the new government lays the path to development of this country, it is of much importance to take progressive measures such as reducing bank formalities and widening the reach of banks along with changing the way the lower strata of the society is viewed in the eyes of bank officials. Whether the government will collaborate with the Indian central bank to overcome financial ignorance and adopt the path to financial inclusion or not, would be interesting to observe in the times to come.