Interface On Financial Inclusion Of Dalits Tribals And .
TABLEOFCONTENTSFOREWORD. i1.BACKGROUND. 12.ACKNOWLEDGINGTHEEXCLUDED: SOME DATAANDANALYSIS . 22.1Data on Financial Exclusion . 22.2Efforts Towards Financial Inclusion . 32.3CHALLENGES3.BUILDING BRIDGES4.CHARTING4.1THETOFINANCIAL INCLUSION . 3TO THEEXCLUDED: HIGHLIGHTSFROM THEINTERFACE . 6INTERFACE . 7Introduction . 74.1.1 Opening Remarks by UNDP and Sa-Dhan . 74.1.2 Central Themes . 84.2Finance Against Poverty: A Film Screening . 84.3The Way It Is: Case Studies and Personal Experiences . 84.3.1 The Story of Dungurpur . 84.3.2 Investigating the Landscape of Poverty . 94.4What has Worked and What has Not: An Overview of Policy,perational Frameworks and Service Delivery Mechanisms . 94.4.1 Points of Discussion . 94.4.2 Ways Forward . 164.5Key Issues and Challenges . 164.6Elaborations on Key Issues and Challenges . 174.6.1 Innovations and Innovative Practices . 174.6.2 Initiatives Towards Collaborative Models . 184.6.3 Exclusion . 205.CLOSING REMARKSBYUNDPANDSA-DHAN . 21ANNEXURE 1: CASE STUDIES . 22ANNEXURE 2: Scheduled Castes sub Plan (Scsp) allocation during Xth Plan Period . 34ANNEXURE 3: Sa-Dhan UNDP Interface List of Participants . 35
FOREWORDWith the aim to understand, promote and highlight the importance of financial inclusion ofScheduled castes, Scheduled tribes and religious minorities, Sa-Dhan in collaboration withUNDP conducted an interface between government representatives, academicians, journalists,practitioners and other stakeholders. The idea to bring people from varied backgrounds andspecializations is an attempt to bring together diverse perspectives and understanding.Dalits and religious minorities have faced social stigmatization throughout the history of India;caste based as well as class based. Such exclusion has undoubtedly led to political and economicdiscrimination, let alone their exclusion from the developmental processes of the country. As hasbeen researched already, there are only 9.3 bank branches per 100,000 populations and only5.2% villages with a bank branch. With such a narrow reach of the banks, the situation of theminority groups worsens due to the already existing discrimination they face. Inaccessibility tobank accounts and formal credit markets still leaves them secluded, underprivileged and exploited.This Interface was designed to provide a platform for people to attempt comprehending theperspectives of other stakeholders and for sharing grass-root realities. For this purpose,participants were provided with case studies from the field and were asked to share their feedback.Such was the uniqueness of the model that all participants were on an equal level of understandingirrespective of their position. The participation of government representatives helped in gainingan insight into what the development has been at the policy level. The mainstream financialinstitutions helped in understanding why, in spite of the availability of multiple products andservices, do the Dalits and religious minorities still suffer from exclusion and how the servicescan be made need-based keeping in mind the needs of the Dalits. The academicians broughtunderstanding of the sociological and financial perspectives of marginalization and the narrativestructures of the Dalits and marginalized groups. Since NGOs, micro-finance institutions andthe media work directly on the ground, their participation helped in answering questions andgaining knowledge from the ground. Including community leaders under this platform was ofgreat value since they have a deep understanding of the operational challenges and the collectiveideas for the betterment of the situations. The Interface arrived at tangible suggestion made bythe participants based on their discussions in regards to the case studies and the ground realitiesthey depict.Sa-Dhan would like to acknowledge the efforts of Mrs. Achla Savyasacchi, Vice President, Mr.Nilesh Arya, Manager- Communications, Mr. Saibal Paul, Donor Relations, Ms. Priyanka Trehan,Senior Program Executive- Policy Team, Ms. Punam Gondia, Senior Program Executive- PolicyTeam, Ms. Vandana, Program Assistant, Sandeep Rewari, Administration Assistant, Kuldeep,Assistant Manager, Hemant, Program Assistant and Ms. Reeti Mathur, CommunicationsExecutive, in making the Policy Interface 2010 a success.Sa-Dhan is also grateful for UNDP's constant concern for the financially excluded Scheduledcaste and Scheduled tribes and other religious minorities. It also wishes to thank Mr. Ratneshfor his exceptional effort in making it happen.Mathew TitusExecutive DirectorSa-DhanPolicy Interface 2010 : A Reporti
Interface on Financial Inclusion of Dalits, Tribals and Religious Minorities: Issues, Challenges and Way Forward1. BACKGROUNDIt was a practice in medieval times for Dalits to tie an earthen pot around their necks so theycould spit in the pot and not defile higher castes. This principle of purity and pollution has,for centuries, legitimized exclusion – socially, culturally, politically and economically – andexacerbated atrocities.The word ‘Dalit’ means broken and downtrodden in Sanskrit. Popularized by B.R. Ambedkar inthe 1920s and 30s, the term gave a new secular identity to millions of those formerly known as‘untouchables’ in India. After India gained independence in 1947, Dalits and other marginalizedgroups have tried often with the help of government programs to participate in mainstreamdevelopment processes. However, a large population still remains excluded.Caste-based exclusion and discrimination are essentially “structural in nature” andcomprehensive and multiple in coverage, involving as their very basis the denial of equalopportunities. The practice of caste-based exclusion and discrimination is defined as “livingmode exclusion” or exclusion from political participation, alongside exclusion from anddisadvantages in accessing social and economic opportunities1.Although plenty of work has already highlighted the processes of marginalization of Dalits andother minorities there remains a need to both further this understanding and use it to establishmore systems to halt and indeed reverse the process of exclusion.It is indisputably true that economic deprivation creates the basic condition for all other formsof exclusion. Indeed, financial inclusion is the key to social and political inclusion. It is imperativeto address the immediate financial needs of Dalits and other marginalized communities in orderfor them to focus on other structural changes and to enable changes in the mindset of thedominant community and polity.It is also accepted that microfinance creates access to productive capital along with humancapital (education, training, nutritional status, etc) and social capital (through local organizationbuilding, women’s empowerment, etc), and enables the marginalized poor to escape poverty.Further, the credit and servicesof microfinance not only upliftthe poor from income povertybut also from knowledgepoverty. Further efforts in thisdirection are impossiblewithout inter-disciplinaryunderstanding and interdepartmental cooperation andcoordination.1 Minorities at Risk, UNDP HDR 2004Policy Interface 2010 : A Report1
Interface on Financial Inclusion of Dalits, Tribals and Religious Minorities: Issues, Challenges and Way Forward2. ACKNOWLEDGING THE EXCLUDED:SOME DATA AND ANALYSIS2.1Data on Financial ExclusionAmajority of India’s financially-excluded sector consists of marginalized farmers, landlesslaborers, self-employed small vendors (hawkers), entrepreneurs in the unorganized sector,urban slum dwellers, migrants, ethnic and religious minorities, senior citizens and women.Dalits comprise a vast proportion of this segment.These groups do not have access to bank accounts and formal credit markets so they fall prey tothe informal and often exploitative market. The poor needs money and the notorious ‘moneylender’ exploits them, creating both a vicious cycle and a downward spiral for the poor, who areeven further economically stunted as a result.A recent study by CGAP2 states that India has only 680 bank accounts per 1,000 adults, 124bank loan accounts per 1,000 adults and an average of only 9.3 bank branches per 100,000population3.According to the Reserve Bank of India4, only 40% of India’s population has bank accounts; 10%has Life Insurance; 0.6% has Non-Life Insurance; and only 5.2% villages have a bank branch.With specific reference to the financial exclusion of Dalits, the Dr Rangarajan Committee reportstates that 49.77% of Scheduled Caste households, 63.68% of Scheduled Tribe households and48.58% of Other BackwardClasshouseholdsarefinancially excluded. Clearly,those worst affected byfinancial exclusion are themost marginalized sections ofsociety: Dalits (SC/ST) andothers.S Singh 5 assesses thesituation thus: “[T]here is adenial from the governmentmachineries to extend thecredit to the Scheduled Castesbecause direct funding frombanks is a problem. It is linkedto lack of education, attitudeof bankers and policydirections to the banking sector. At the scheme level access is denied because of non-inclusionin lists like Below Poverty Line (BPL) and [because of] social exclusion itself. Most schemesrequire paper work, recommendations, forwarding of applications, and other processes. Scheduledcastes lack or cannot facilitate most of these formalities.”2345Financial Access 2009, Publication of World Bankhttp://inclusion.skoch.in/index.php?option com content&view article&id 414A Presentation by Dr KC Chakrabarty, Deputy Governor, RBI at 20th SKOCH Summit 2009, Mumbai on July 17,2009Financial Exclusion and the Underprivileged in India, Singh, SPolicy Interface 2010 : A Report2
Interface on Financial Inclusion of Dalits, Tribals and Religious Minorities: Issues, Challenges and Way Forward2.2 Efforts Towards Financial InclusionThe 2002 Bhopal Declaration6 – intended to widen the scope of Dalit inclusion – put forward a21-Point Action Agenda, which also highlighted the plight of SCs, STs and other minorities.Significant issues raised in the agenda included: Acknowledging the need to ensure that SCs and STs are given representation in alldecision-making bodies. Acknowledging the fact that Dalits are still denied basic human rights and suffer themost brutal and oppressive forms of discrimination and exclusion. Acknowledging that most political organizations are reluctant to pursue any policyfavorable to Dalits. Regretting the fact that post Ambedkar, the Dalit intelligentsia has failed both in carryingforward his emancipating movement and in making a dent in the country’s intellectuallife. Being conscious of the hurdles that caste-Hindu society – and its tentacles in thegovernment, media, voluntary sector, etc – is likely to hurl at any movement that seriouslychallenges the entrenched system of discrimination and exclusion. Welcoming the winds of change across the world that are conducive to inclusion, equalopportunity, diversity, democratization and civil society, and are against discrimination,stereotype, stigma, exclusion and caste society.72.3Challenges toFinancial InclusionExisting societal mechanismscontinue to regulate andenforce the customary normsand rules of the caste system.Dalits, Scheduled tribes andreligious minorities whochallenge the system faceopposition in the form of socialand economic boycott,violence, etc, which negatetheir right to development.AccordingtoSukhdeoThorat8, caste-based exclusion678The Bhopal Conference: Charting a new course for Dalits for the 21st century, held at Bhopal, Madhya Pradesh,India, 12-13 January 2002. The main issue was the development of ‘Dalit capital’ and the ‘democratizing capital’ toensure proportionate shares for SCs and STs. Discussions also included land distribution and Dalit reservation. TheBhopal Declaration was envisaged to enable Dalits to enter the market economy with adequate investment resources,capacities and skills for enterprise.The Bhopal Declaration was headed by Chief Minister, Digvijay Singh. The attempt was to mainstaream Dalitconcerns in MP, which would have a spin-off effect throughout the country. About 250 academicians, professionalsand activists participated in the event titled, ‘Transforming India Through a Dalit Paradigm’.Thorat, Sukhdeo, “Caste, Social Exclusion and Poverty Linkages – Concept, Measurement and Empirical Evidence”,2008Policy Interface 2010 : A Report3
Interface on Financial Inclusion of Dalits, Tribals and Religious Minorities: Issues, Challenges and Way Forwardand discrimination is located in the economic, civil, cultural, and political spheres.9In administrative parlance, the term ‘Dalit’ includes Scheduled Castes, Scheduled Tribes andOther Backward Castes (SCs, STs and OBCs). However, in common political discourse, Dalitrefers to Scheduled Castes alone. B R Ambedkar was the first person to use the term Dalit toconnote those groups of people who are systemically oppressed through cultural and politicalcustoms and mores. Thus, ‘Dalit’ indicates a struggle for an egalitarian order. Ambedkar arguedthat a transformation was required in the socio-religious and politico-economic structures ofIndian society through relentless struggle against the exploitative system wherein lay the rootsof untouchability. Though Ambedkar suggested the subaltern approach to fight for Dalit causes,he also made constitutional provisions for Dalits at the macro level.Thus, Article 17 of the IndianConstitutionstates:‘Untouchability is abolishedand its practice in any form isforbidden. The enforcement ofany disability arising out of‘untouchability’ shall be anoffensepunishablein10accordance with the law’ .Lateracademicshaveexpanded the scope of studyingthe macrological distribution ofmoney and therefore power,even further: to the relationsbetween global capitalism andalliances of nation states 11.However, even within a nation state, macro-level policy generation often homogenizes theeconomically dispossessed. The scale is so big that it cannot account for the micrologicalunderstanding of money and therefore power, for the subaltern12.9101112Firstly, economic exclusion can be practiced in the labor market through denial of jobs; in the capital market throughdenial of access to capital; in the agricultural land market through denial of sale and purchase or leasing of land; inthe input market through denial in sale and purchase of factor inputs; and in the consumer market through denialin the sale and purchase of commodities and consumer goods.Secondly, discrimination can occur through what Amartya Sen describes as “unfavorable inclusion”, throughdifferential treatment in the terms and conditions of contract, one of them reflecting in discrimination in the pricescharged and received by discriminated groups. Discriminated groups can get lower prices for the goods that theysell, and could pay higher prices for the goods that they buy, as compared with the market price or the price paid byother groups.Thirdly, exclusion and discrimination can occur in access to social needs supplied by government or public institutions,or by private institutions in the fields of education, housing and health, including common property resources likewater bodies, grazing land and land for common use.Fourthly, groups (particularly untouchables) may face exclusion and discrimination from participation in certaincategories of jobs (the sweeper being excluded from household jobs) because of the notion of purity and pollution,and may be restricted to so-called ‘unclean’ occupations. In the civil and cultural spheres, untouchables may facediscrimination and exclusion in the use of public services like roads, temples, water bodies, and institutions deliveringservices like education, health and other public services. In the political sphere, untouchables could face discriminationin the use of political rights, and in participation in the decision-making process. Due to physical (or residential)segregation, and social exclusion on account of the notion of untouchability, they may suffer from a general societalexclusion.Ling, T. (1980). Buddhist Revival in India. Aspects of the Sociology of Buddhism. New York: St. Martin’s Press.Suggested by Gayatri Chakravorty Spivak.Gramsci connotes the term ‘subaltern’ for the economically dispossessed.Policy Interface 2010 : A Report4
Interface on Financial Inclusion of Dalits, Tribals and Religious Minorities: Issues, Challenges and Way ForwardEmpirical evidence suggests that financial services to the poor have positive social impacts;nutrition, health, education, status of women, etc are all enhanced. Much work has alreadybeen done by the Government of India, Microfinance Institutions (MFIs), etc in this area, butthere remains a need to further the study of causes that lead to continued exclusion ofmarginalized groups.It is towards that end that Sa-Dhan13 decided to address the long-felt need to form a specializednetwork of Community Development Finance Institutions (CDFIs) that could take forward therequirements of both the poor and these organizations. Some of the issues it wished to air weredialoguing with policy makers, capacity-building, and the identification and development ofminimum standards of performance in a participatory manner so that the challenge of creatingsustainable livelihoods is made possible.This requires a commonplatform that could enable aqualitatively better dialogue,especially between MFIs,communitybasedorganizations and otherstakeholders who recognizethat despite their diversity,they must increase theoutreachofexistingprograms, launch newinitiatives and negotiate withpolicy-makers for a favorableenvironment.The Government of India isaimingtowardsTotalFinancial Inclusion by 2012. However, as is clear from the preceding data and analysis, the gapbetween the overall requirements and coverage is huge, and most so in the case of Dalits andother marginalized groups. To target this objective, there is a need to bridge gaps by focusing onneglected areas.13As an association of Community Development Finance Institutions, Sa-Dhan has been an active participant inmany of the debates on an enabling policy and operational environment for the microfinance sector at various levelsand with a diversified community of conc
states that 49.77% of Scheduled Caste households, 63.68% of Scheduled Tribe households and 48.58% of Other Backward Class households are financially excluded. Clearly, those worst affected by financial exclusion are the most marginalized sections of society: Dalits (SC/ST) and others. S Singh5 assesses the situation thus: “[T]here is a
Chapter 3 Financial Inclusion – Conceptual and Analytical Framework 3.1 Concept of financial inclusion 17 3.2 What is financial inclusion and/or financial exclusion? 18 3.3 The role of rural banks in boosting financial inclusion and promoting access to credit facilities in unbanked locations within Ghana 20
4 full financial inclusion can only be achieved when the users of financial services "not only have access to a range of financial services but are able to use them regularly as well".7 Financial literacy has been recognized as a key driver for financial inclusion,8 and has been incorporated as an integral part of the financial inclusion policy agenda of many countries.
Financial Inclusion Forum4, the Financial subject—the ultimate goal of efforts aimed at increasing financial inclusion is not simply a rise in the share of households that rely on services provided by banks. Rather, the aim of expanding financial inclusion is to provide more households with access to safe and affordable financial services.
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Indonesia's Financial Inclusion Commitment in International Fora Indonesia plays an active role in financial inclusion discussions in international fora. As a member of G-20, Indonesia ensures that The nine G-20 Principles for Innovation Financial Inclusion are implemented at national level. Indonesia is also committed in OECD forum to
financial inclusion is multi-dimensional, both participation barriers and financial frictions will be identified. A micro-founded general equilibrium model will be developed in order to identify constraints to financial inclusion. The focus will be on three segments of financial inclusion: access, depth and intermediation efficiency.
The State of Financial Inclusion The case for financial inclusion is well known and well documented. Nevertheless much of the information on approaches to financial inclusion still lacks sex-disaggregated data, and thus maintains the prevailing gender gap in the access that women and men have to financial products and services globally.
