CRISIL Inclusix Essay Example

use the index to monitor progress in financial inclusion and address issues as needed while banks can set targets for inclusion and track outcomes. RIB and Ministry of Finance strongly support CRISIS Inclusion with data for the tool coming from RIB. A team of dedicated analysts at CRISIS have helped make this initiative possible.The first report covers financial inclusion metrics in 632 districts across the country from 2009 to 2011 with plans for regular updates allowing for monitoring improvements over time.The CRISIS Inclusion framework and analysis are predicted to accelerate financial inclusion progress in the near future. To address other macro-economic challenges later on, it is necessary to develop a culture that prioritizes analytics and metrics. CRISIS Ltd's Managing Director and CEO, Rope Kudus, highlights financial inclusion's significance as a driving force for economic and social growth in India where many individuals lack access to formal financial services. As part of their corporate social responsibility, CRISIS identified an opportunity to use their expertise in analytical frameworks and indices within the financial sector by creating a tool that could assess financial inclusion objectively - resulting in India's first comprehensive financial inclusion index called CRISIS Inclusion. With support from both the Reserve Bank of India and Ministry of Finance, this assessment combines branch integration (BP), deposit penetration (EDP), and credit penetration (CAP) into one metric rated between 0-100; valuable for those involved with policy-making, regulation or intermediaries within the finance industry. The evaluation measures financial inclusion at various levels - national down to district level- against ideal benchmarks for each parameter, with 100 being considered optimal across all three areas.The CRISIS Inclusion scores are divided into four

levels to represent varying degrees of financial inclusion: High, Above Average, Below Average, and Low. These categories are color-coded in the table rows. The methodology for this index is robust, transparent, and easy to understand - similar to other global indices such as the Human Development Index by UNIT. One important element of this index's design is its use of non-monetary parameters which focus on the number of individuals who have been touched by various financial services rather than simply looking at monetary amounts deposited or loaned out. This approach ensures that a few high-value figures do not unfairly impact the overall assessment. Furthermore, the index can be scaled up or down as needed.

While the current version of this index utilizes information from banking-related services only, it has potential for future expansion by incorporating insurance and non-banking financial companies into its parameters. By offering both a comprehensive overview of a country's level of financial inclusion as well as detailed ground-level data on progress in remote rural districts, CRISIS Inclusion creates opportunities for policymakers, regulators, and bankers alike to identify priorities, design targeted initiatives and measure progress towards achieving their inclusion goals.CRISIS Inclusion has various potential uses, such as objectively measuring financial inclusion levels, developing customized initiatives for regions with limited inclusion, promoting financial education in those areas, and assisting regulators in establishing prudential requirements and lending status. It is a valuable tool that bankers can use to create measurable financial inclusion plans and evaluate the performance of field staff during implementation. Our report indicates that the overall CRISIS Inclusion score for India is 40.1 out of 100, which highlights low formal banking facility penetration across

most of the country. Approximately half of Indians have savings accounts while only one-seventh have access to credit from banks. The bottom 50 districts account for only 2% of bank branches throughout India. Deposit penetration (EDP) plays a significant role in driving financial inclusion in India since there are 624 million savings accounts compared to just 160 million loan accounts. It is crucial to improve branch presence and credit availability since the bottom 50 districts have only 4,068 loan accounts per lakhs of population - nearly one-third less than the all-India average of 11,680.The number of branches per lake of population in these districts is only three, compared to the all-India average of 7.6 branches. Despite an increase in deposit penetration leading to a rise in the CRISIS Inclusion score from 35.4 in 2009 and 37.6 in 2010 to 0.1 in 2011 nationwide, disparities remain between states and regions. For example, four districts in the North-East have only one bank branch each while the six largest cities contain over 11% of the country's bank branches. The top performing fifty districts experienced significant growth in deposit and branch penetration resulting in a nine-point increase for their EDP score between 2009 and 2011 as the primary factor behind their continued success.