Byron Vielehr, President, International and Global Operations of Dun & Bradstreet, the 171-year- old provider of business data and risk-management services, in an interview with OneWorld South Asia, said that technological advantages should be leveraged to drive up financial literacy levels. Excerpts from the interview.
OneWorld South Asia: How can India achieve the goal of financial inclusion?
Byron Viehler: There are a couple of things that need to happen. One is to push the banks to smaller towns and their regular expansion. I also think that private sector has an opportunity to provide services to individuals and small businesses.
Companies like Dun & Bradstreet build databases around businesses by tracking around 200 million businesses worldwide. Most of these businesses are of small scale. We have a perspective, that for companies, particularly the smaller ones, access to credit is their life blood.
If they can get the credit, they can grow and pay off the loans, take more loans move ahead in the direction of steady growth.
Viehler: Among many things which technology can provide, it can help drive the financial literacy. Technology can also help educate small business holders about significance of loans and the importance of credit rating.
A wise combination of financial literacy and providing solutions to their problems will help in improving the lot of poor. The usage of mobile phones can also be leveraged to move the money around and manage payments.
Some of the micro finance businesses have already done that and are taking the benefits of these tools to the deprived sections. Micro finance businesses have successfully helped very small entrepreneurs to grow and survive.
OWSA: How can the developing countries like India, Pakistan, Bangladesh and Nepal bridge the existing financial divide in their respective geographical boundaries?
Viehler: These countries have to understand the importance of the notion of financial inclusion. The developing countries cannot focus on big corporate entities alone or else they will end up in a big financial divide and never grow.
The whole movement around self-help groups (SHGs) is providing money to very small businesses and entrepreneurs and leading them to sustainability. Without a focus on this what will happen is that only the medium size businesses will continue to grow.
But, there is a need to shoulder the responsibility to help these very small segments of the market place. Over time this will drive economic activity outside the metro cities.
OWSA: What kind of role do you think mobile-payments and e-payments can play in bringing about financial inclusion of women?
Viehler: Mobile banking and e-payments can bring a real difference for bringing financial inclusion of women. Walking around with cash can be a dangerous thing, so mobile banking and e-payments can increase security and safety of all small businesses and the migrant workers, especially of women.
OWSA: How important is financial inclusion for the inclusive growth of a country in an era when we are only concerned about an upward trend in terms of numbers?
Viehler: If India wants to sustain high levels of GDP growth, it needs to get the demographic dividend by educating people and driving up economic growth in the rural areas.
If India concentrates all its economic growth in big cities it will be difficult for the country to sustain in the long run.
The challenge is to put an end to economic divide. It is difficult to have a broad economic divide with haves and have-nots as it creates social instability. By focussing on education we can improve the lot for everybody without increasing the economic divide.
OWSA: How can banks be involved to further the idea of financial inclusion?
Viehler: Banks have to be the foundation of what’s going on from the financial perspective including inclusion. It is clear that the notion of financial inclusion is on the agenda of banks. A large number of banks including the State Bank of India are trying to help in this direction. They are trying to put branches in small towns and smaller communities.
Banks are also endeavouring to put solutions into market place for immigrant workers or savings programmes to help people understand the value of savings.
OWSA: How can financial inclusion lead to sustainable development in the South Asian region?
Viehler: Helping people to grow small businesses is important as most job creations in most economies come from small businesses and it does not come from the really big entities.
These countries need to create an environment where small businesses can grow. At the end of day, inclusion is about people, therefore the governments should keep human factor in mind while framing policies.