After the success of Electronic Benefit Transfer (EBT) system for payment of wages to beneficiaries under the National Rural Employment Guarantee Scheme and social security pensions, the same mode is being explored to enable the wage earners save part of their earnings.
There are families with four or five wage earners each under NREGS who earn close to Rs.3,000 a week. Once the cash is in their hands, they end up spending the entire amount on non-priority items for lack of savings accounts. “In other words, the focus so far has been only on ‘Çash Out’ transactions and no ‘Cash In’ transactions under the EBT. The proposed EBT-led financial inclusion gives an option for the beneficiaries to save part of their earnings in savings accounts and slowly graduate to availing of different financial services,” explained Mr. Mario Roche, vice-president, FINO Pay Tech Ltd.
FINO as the Business Correspondent offers banks an integrated technology platform and delivery channel to serve micro customers in un-banked and underserved areas. The company plans to roll out the new service with Axis Bank in Krishna district in January to help beneficiaries do savings through the smart cards by which they receive welfare funds. “We are looking at savings of Rs.100 a month per individual with a monthly income of Rs. 2,000 The target is to open one lakh savings accounts in high earning gram panchayats,” he said.
FINO, as a Business Correspondent of ICICI, Axis and Corporation Banks facilitates EBT payments to more than 11 million beneficiaries in 13 districts in the State through about 6,000 women agents recruited from SHGs.
The NREGS in Andhra Pradesh is totally technologically driven right from demand for work to the delivery of wages, with hardly any scope for leakages. “ FINO, through its agents, handled payments of Rs.1,800 crore under NREGS and pensions last year in the State and in the current fiscal, it disbursed upto Rs.1,300 crore,” he disclosed.
