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PMJDY 2.0

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Current status of PMJDY
1. PMJDY in numbers
2. Challenges

3 3
Pradhan Mantri Jan-Dhan Yojana-Indicators and Challenges
Bank A/c’s
Rs. 736 billion in deposits with
average balance of Rs. 2373
310 million accounts 5 million accounts closed
Savings Balances
Banking
Infrastructure 126,000 BMs for 1.26 lakh SSA
Only 89% of 1.26 Lakh BMs are
active as on 31.03.17
Challenges
*Data collected through parliamentary sources and PMJDY website
Status
Rs. 1136 average overdraft to 31
Lakh individuals5,000 Overdraft Perceived as “free money”
20% of a/c in-operative (As per RBI
guidelines)

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Channel Outreach What is the optimal number of active agents to reduce distance and travel time?
Channel Structure How do we improve profitability to make the agent network sustainable?
Channel Management How can we automate channel management to reduce frauds and make it
transparent?
Customer Protection
How to design a responsive recourse mechanism to protect vulnerable segment’s
interest?
Products
How should the products be bundled/tailored to cater to the needs of the
PMJDY segment and increase usage?
What can be design principles for PMJDY 2.0

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Channel Outreach

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Financial access point per 100,000 adult is low vis-à-vis other
developing countries in Asia and Africa
*Source: IMF Financial Access Survey, 2015; Costs of Cash In India, Institute of Business In the Global Context; Cost and Willingness to Pay, MicroSave; and World Bank Data Bank.
In Rajasthan beneficaires have to travel an average of 5 kilometers to withdraw cash from a bank and spend on an average 30
minutes at the bank branch to conduct a financial transaction.
42 69 98
223 265
548 554 569
933
Nigeria Philippines India Indonesia Pakistan Uganda Kenya Bangladesh Tanzania
Financial access points per 100,000 adult population*
Financial access points only includes commercial Banks, ATMs and Agent (
mobile baking and BCs)
Bank branch and ATM penetration is
better than most countries but banking
agents is one of the lowest
65
246
538 553
India Pakistan Kenya Bangladesh
Mobile agents/agent outlets** per
100,000 adult population
31%
36%
22%
11%
< 1 km
1-5 km
5-10 km
>10 km
Bhamashah: How Far is the Bank Branch?
(N=386)
The trip-to and from the bank, on an average
costs INR 22 per head.

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Optimal number of agents required…
 It is important to determine the optimum number of agents for a given geography.
 The population data (Census 2011), formal financial users (FII Wave IV Survey) and median
services (ANA India Wave II) data were used to determine the optimum number of agents.
 The agent numbers are estimated for the 12 states covered under ANA survey since the
variations among states were very high.
 The estimates for 12 states have been extrapolated to national level on the basis of
GDP/capita.
 The optimum agent numbers for India is: Overall – 686,150

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What would the optimal number look like?
1 Madhya Pradesh 72,597,565 14,666,175 51.7% 7,582,412 7 53,076,886 1,769,230 35,385 2
2 Uttar Pradesh 199,281,477 40,258,884 71.3% 28,704,584 7 200,932,091 6,697,736 133,955 10
3 Bihar 103,804,637 20,970,634 65.3% 13,693,824 8 109,550,591 3,651,686 73,034 6
4 West Bengal 91,347,736 18,454,088 62.2% 11,478,443 8 91,827,542 3,060,918 61,218 4
5 Haryana 25,353,081 5,121,835 55.7% 2,852,862 6 17,117,171 570,572 11,411
6 Punjab 27,704,236 5,596,815 41.7% 2,333,872 6 14,003,232 466,774 9,335
7 Assam 31,169,272 6,296,823 56.2% 3,538,814 8 28,310,515 943,684 18,874 1
8 Tripura 3,671,032 741,623 64.2% 476,122 5 2,380,609 79,354 1,587
9 Andhra Pradesh 49,386,799 9,977,131 71.0% 7,083,763 7 49,586,342 1,652,878 33,058 2
10 Tamil Nadu 72,138,958 14,573,527 69.0% 10,055,734 3 30,167,201 1,005,573 20,111 1
11 Gujarat 60,383,628 12,198,713 38.2% 4,659,908 6 27,959,450 931,982 18,640 1
12 Rajasthan 68,621,012 13,862,831 45.5% 6,307,588 9 56,768,292 1,892,276 37,846 2
Total 454,453 34
S No State Name
Population
Level
Number of
Household
% Financial
Users FII Data
Formal Financial
User HHs
Median
Services
Total txns in a
month
Total txns
in aday
Number of
Agents
Total Se
Agen

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Channel Structure

10 10
120
77 75 70
57
43 42
31
16
6
240
154
188
175
190
149
105 103
53
18
Senegal '15 Kenya '14 Uganda '15 Tanzania '15 Bangladesh
'16
Pakistan '17 Zambia '15 India '17 India '15 Indonesia'17
Profits(USD)
Current Prices PPP Adjusted
1. Agency remains a low-profit business – driving unauthorized charges
2. Agency typically remains an add on business.
Agents in India are earning far below than their counterparts in
other developing countries in Asia and Africa

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Even though the profits have doubled in last two years , still about
1/3rd of agents make losses
Revenue and Expenses of
Agents*
Sales Agents
(Non-
dedicated)
Service
Agents
(Dedicated)
Median Monthly Revenue
Revenue from agency banking 6000 6000
Median Monthly Opearting Expenses
Rent Expenses 2000 800
Utilities Expenses 1500 1000
Salaries of Satff 0 0
Travel Expenses 500 500
Personal Expenses 0 0
Other Monthly Expenses 800 500
Profitability of Agents
Sales Agents
(Non-dedicated)
Service Agents (Dedicated) Overall
Agents making profit of 6400 and above (4%-65% between states) 26% 16% 20%
Agents making profit of 3200 and above (17%-75% between states) 46% 39% 43%
Agents making losses (10%-52% between states) 21% 36% 29%
76 77 93 110
160
264 257
310
220
320
Pakistan '17 Bangladesh '16 India '17 Kenya '14 Senegal '15
Median Total Monthly Revenue (USD)*
Current prices PPP Adjusted**

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Agents should be categorised under service, sales and roving agents on the basis of
varied financial demands of different customer segments and geography
Aspects Sales Agents Service Agents
Business Model Non-dedicated Dedicated
Services Savings
Insurance
Loans
Payments
Payment services
(CICO)
Account Opening
Location Predominantly in urban,
per-urban and economically
developed rural areas
Predominantly in rural
areas with lower level of
economic activity
Transaction Devices Laptop, mobile,
printer/scanner and
biometric reader
Smart phone linked to a
biometric reader (or
other low-cost front end
interface)
CAPEX
Requirements
High Low
OPEX Requirements High Low
Basic Service Agents:
For villages with basic infrastructure facilities
and access, minimum office space and enabled
for G2P registration services.
SHG Service Agents:
Using already existing SHG channel to
increase uptake of financial services by
women. As of March 2017, there are 85 lakh
SHGs with deposits of about 16,114 Cr and
annual loan offtake of 38,800 Cr*.
Roving Service Agents:
For remote and hard to reach villages, agent
with smart phone and biometric reader and
facility to refer to sales agents for more
services.
* NABARD Report

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Responsible product bundling is the key for high consumer uptake
PM Swarn Saubhagyawati Yojana
(Gold based investments for
marriage)
• The individual can invest small amounts daily, weekly, fortnight or monthly in 3-5 years.
• After completion of tenure, depositor can get a certain amount of gold; provide poor with an avenue to
save for their children’s wedding or to create an aspirational asset
• Bank can hedge depositor against gold price to protect poor against market fluctuations.
• Client can take instant loan against deposit up to 75-80 percent of deposit amount.
Pradhan Mantri Swaniyojan Yojana
(Savings linked to income
generating activities)
Bundling of insurance with savings
to increase uptake
• Daily, weekly, fortnightly or monthly savings; Offer structured savings such that at the end of the
savings cycle, they have option to buy a physical asset such as a livestock or use it for activities such as
renovation of house/shop etc..
• Livestock will be geo-tagged and insured and poor people can use the savings pool to diversify the
income activities.
• This is also in line with the government’s goal of doubling farmers’ income by 2022
• Client can take instant loan against deposit up to 75-80 percent of deposit amount.
• Bundling insurance with savings makes its easy for the customers to understand the benefit of
insurance and reduces cost of delivery to service providers
• Each structured savings product to bundle insurance
• In Ghana, BIMA and Vodafone introduced savings linked insurance product for fisherman
Digital credit for agents
• Access to instant, automated and remote digital credit (initially for agents) to meet short-term liquidity
needs
• Scheme can be extended on the basis of savings volumes, frequency, regularity to PMJDY account
holders. An algorithm can be developed for this purpose.

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PMJDY 2.0-Need based products to be developed for different customer segments’
Persona Needs Gaps Products recommended
Housewife
• Small ticket-size savings
• Easy availability of personal
loans
• Insurance and Pension
• No collection process for savings
• Limited credit history
• Low cost insurance products
• Low financial literacy
• Savings: Doorstep banking services (BC)
• Credit: Capturing the information based on SHG / MFI
records
• Insurance: Suitable non-life products (type and
collection)
• FL through local influencers
Small
shop-
keeper
• Daily doorstep savings
• Hassle-free loans
• Asset and Health insurance
• Low cost acceptance infra for
payments with value addition
• No collection process for savings
• Lack of credit / digital transaction
history
• Low cost non life insurance product
• Value and cost of digital interface
• Savings: Refined savings options.
• Credit: Easy and quick loans
• Insurance: Suitable non-life products (type and
collection)
• Payments: Low cost digital interface with value adds
Small
farmer
• Strong BC agent network in
rural areas to save travel time
• Inability to fill ‘cash deposit form’ due
to low literacy
• Lack of doorstep financial services
• Strengthening the BC agent network in rural areas
• Credit: Simplifying the loan availing process
Informal
Worker
• Access to reliable savings
• Micro-loans
• Low cost insurance
• High interest rates charged by
informal moneylenders
• No products such as micro-loans
• Strong agent support
• Credit: Easy loans with low KYC requirement
• Insurance: Low-cost insurance
• Payments & Tranfers: Affordable, easy mobile-based
Migrant
Worker
• Easy loans with low KYC
requirement
• Affordable and easy mobile-
based P2P transfers
• Visiting bank to deposit small savings
• Rejection of MFI loan
• Higher interest rates charged by MFIs
• Strong agent support
• Credit: Easy loans with low KYC requirement
• Payments & Transfers: Affordable and easy mobile-based

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Channel Management
1. Agent Tracking and Reporting
2. International best practices

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Source – ANA India research 2017, * MicroSave Consumer Protection report 2015
*Please note - In Kenya, agents reported whether they or one of their employees had ever experienced robbery or fraud. In all the other countries, we asked agents whether
they or their employees had experienced such incidents within the last year. Thus, the data is not fully comparable.
In 2017, the median amount of money lost due to fraud is USD 115 per agent i.e. $15 million loss to
the economy.
4% Agents stated that they were covered under insurance by
banks/BCNM for emergent risks
42% Agents did not report fraud to anyone
33%
18%
15%
4%
15%
10%
1% 1%
53%
42%
22% 22%
14%
11%
22%
2%
Uganda '15 Tanzania '15 Kenya '14 Bangladesh '15 Senegal '15 Pakistan '16 India '17 Indonesia'17
%Agents
Robbery/Theft* and Fraud: ANA Research Countries*
Robbery/Theft Fraud
About 22% agents in India have experienced atleast one fraud in the
past one year (11 times from 2015). The current channel is in the
dire need of an integrated agent channel management system

MicroSave
What are the Customers Worried About?
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Risks Uganda Bangladesh Philippines Colombia
Service Downtime
Agent Liquidity
PIN Security
Customer Recourse
Wrong Transactions
Agent Overcharges
Unclear Pricing
Transparency
Unsecure Locations
Agent Unavailability
Fake Money
Fake Messages
Losing Phone and Money
Agent Misbehaviour
Untrustworthy Agents
LEGEND: Moderate RiskHigh Risk

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Basic architecture of a Agent Management System (AMS)
Agent
Management
System
Input Output
• National agent registry –
biometric verification of agents,
agent segmentation
• Agent transactional data –
System login and logout, integrating
daily transactions
• Monitoring– Mystery shopping,
Agent Audit and remote monitoring
through GPS; Monthly/quarterly
reports on agent’s performance
• Feedback and complaint system
– central customer care no. routed to
service providers with dedicated
response time using social media
• Capacity building – online need
based training for agent skill
enhancement, testing and
certification of agent knowledge
Recourse
Mechansim
ePaathshala
• Agent transaction analysis
– transaction of agents (as per
location, type of agents), market
led product development and
customized product offering.
• Dormant and blacklisted
agent data
• Agent follow up – identifying
process related issues with
agents and implementing
solutions
• Training requirement – live
feedback on agents training
requirements
• Information portal – RBI
regulations for agents, code of
conduct guidelines
RBI
IBA
DFS
Banks
BCNM

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A day in the life of an agent management system (AMS)
registered agent
Process Flow
One time
biometric
registration to
AMS
Agent logins to
AMS either through
GPS enabled
desktop/laptop/tab
let/mobile phone
Agent is contacted through
customer care/visit by bank
or BCNM support. Surprise
visits can also made
(mystery shopping) by third
party
Day to day transactions
are carried out by
agents on bank/BCNM
system and logs feeded
to AMS system
Agent needs info/training
on consumer protection so
he gains access to the AMS
training modules and
watches videos to learn
Agent logs off
from their
device at the end
of the day
Agent enters a customer
complaint into the
automatic complaint
system and provides the
complain no. to customer
Creation of national databases and Big Data through the AMS system
Agent registry Database of inactive
and blacklisted
agents
Training and
certification
database of agents
Live complaint center – customer
care team using social media
platforms for quick turnaround

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MicroSave Offices
Delhi Lucknow
Hyderabad
Manila
Jakarta
Kampala Nairobi
Port Moresby
MicroSave (India)
Head Office: Lucknow
Tel: +91-522-2335734
Fax: +91-522-4063773
New Delhi Office:
Tel: +91-11-41055537/38
Hyderabad Office:
Tel: +91-40-23516140
info@MicroSave.net
MicroSave (Kenya Office)
Shelter Afrique House,
Mamlaka Road,
P.O. Box 76436, Yaya 00508,
Nairobi, Kenya.
Tel: +254-20-2724801/2724806
Fax: +254-20-2720133
Mobile: +254-0733-713380
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MicroSave (Uganda Office)
Ntinda Ministers Village
Plot 27, Valley Drive
P.O. Box 29111
Kampala, Uganda.
Phone +256-312 202342
Mobile:
+256-706 842368
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The Folly, Watledge Close,
Tewkesbury,
Gloucestershire
GL20 5RJ
UK
Tel. +44 1684-273729
Mobile +44 796-307 7479
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Condominiums,
Pearl Drive corner Gold Loop,
Ortigas Center, Pasig City,
Metro Manila, Philippines.
Tel: +(632) 477-5740
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info@MicroSave.net
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Jend.
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Indonesia.
Tel: +62 82122 565594
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Guinea.
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8823/321 8854
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Tewkesbury
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