'Banks Have $380 Bn Market Opportunity in Financial Inclusion'
BENGALURU: Banks can address an additional USD 380 billion market in annual revenues by targeting micro-enterprises and bringing unbanked and underbanked adults into the formal financial system, according to a report.
Closing the small-business credit gap at average lending spreads and adding fee-based services could generate about USD 270 billion in additional revenue for banks, while including unbanked adults into the formal financial system could generate another USD 110 billion, the report by Accenture said.
Until now, supporting financial inclusion has not been viewed as a viable business plan for banks, it said.
“77 pct of the 30 banks surveyed for the report were focused on short-term profit-driven commercial opportunities in a piecemeal manner, or were driven by philanthropic ambitions, the corporate social responsibility agenda or regulatory pressures,” it said.
Only 23 pct of banks surveyed had financial inclusion as part of a coherent corporate strategy leading to long-term, sustainable investment plans to develop inclusive business models, it said.
“The traditional view has been that banking the unbanked and underbanked tended to be low-end, unprofitable and philanthropic.” it said.
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