In a speech at the Global Inclusive Finance Summit, Chief Economic Advisor V. Anantha Nageswaran emphasized the need for inclusive finance to be integrated with health-care insurance and social security. He pointed out that unexpected events like health issues often lead to loan repayment defaults, underscoring the importance of a broader financial ecosystem. Nageswaran urged mainstream banks to actively include new successful borrowers in their core portfolios, rather than being passive observers of economic formalization.
Discussing financial inclusion, Nageswaran highlighted the significance of impact investing, where social returns are factored in alongside financial gains. He cited the PM Svanidhi scheme’s achievements, noting that even street vendors can thrive with discipline and support from the formal banking sector. He stressed the transition from being a micro borrower to having diverse financial options for business expansion, emphasizing the value of timely payments over microcredit for small entrepreneurs.
Nageswaran cautioned against expecting high returns from institutions supporting financial inclusion, advocating for a balance between social and financial outcomes. He emphasized the importance of fair contracts and prompt settlements, stating that these practices benefit small enterprises more than microcredit alone. By focusing on customer success and sustainable growth, institutions can better serve the needs of micro-entrepreneurs and foster economic empowerment.
