This paper explores how Banks and MFIs in partnership can achieve financial inclusion in the long run while working on the business correspondents (BC) model. In 2006, the Reserve Bank of India (RBI) permitted banks to use services of third parties as BCs to increase its outreach beyond its branches.
This paper identifies banks, BCs, agent network managers (ANMs), customer service points (CSPs) or agents and technology service providers (TSPs) as distinct players in this model. The BC channel provides banks and their MFI partners with a plethora of opportunities.
The paper concludes that MFIs are potentially an excellent channel and product development partner for banks as they can leverage their existing engagement with the customers. However, the entire sector is still searching for a blueprint, and MFIs have valuable inputs to bring to that.