CHENNAI: Southern states are outshining the rest of India in mobile banking adoption in savings accounts, according to a report by The Boston Consulting Group (BCG).
The report was done in association with FICCI and Indian Banks’ Association.
As per the report, in terms of accounts with at least one financial transaction on mobile banking in the last six months of FY18, as a percentage of total active savings bank accounts (FY18) - Telangana is at 10%, Andhra Pradesh at 6.30%, Karnataka at 5.50%, Puducherry at 5.80%, Tamil Nadu at 5% and Kerala at 4.70%. The India average is 3.40%.
The report had a sample size of over 2,600 respondents and BCG factored 34 banks across four segments – 15 medium PSU banks; six large PSU banks; and five new private banks.
Mobile banking activation is at 21% for private banks and at 3% for public sector banks for FY18, BCG said in the report.
It also said that eastern and southern states were leading the charge as India continued on the digital journey. In terms of accounts with at least one financial transaction on Internet banking in the last six months of FY18, as a % of total active savings bank accounts- Telangana, Manipur and Mizoram had over 20% when compared to national average of 11.30%. Other southern states too topped the national average on the metric.
The theme of the report is “Providing financial services to SMEs in an increasingly digital ecosystem”.
The report pointed out that digital lending to MSME had a huge untapped potential.
“Currently, in India, out of the total formal credit of around ₹100 lakh crores, only 25% is extended to MSMEs. Spurred by the introduction of the Goods and Services tax (GST), small businesses are increasingly getting formalized as well as digitised. The percentage of MSMEs using digital channels has increased from 41% before the introduction of GST to 47% after GST,” it said.
BCG said that MSME lending in the economy was at an inflection point, and could be the next engine of credit growth.
“Currently, digital lending accounts for only 4% of total MSME lending. However, it is expected to rise to twenty-one per cent over the next five years. This significant jump will close the gap with digital retail lending, which is expected to reach around forty-eight per cent of total retail lending in five years,” it added.
