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The Business of Financial Inclusion

The discussion on financial inclusion ought to focus a lot more on building an economically viable and consumer acceptable business model, with a specially designed regulatory ecosystem appropriate for that model. Evangelism or moral pressure to force banks to serve those not so far served by them cannot help square a circle. But a new tetrahedron that is superior to both the circle and the square can be built if we abandon orthodoxy and do not constrain the business model by saying: (a) Financial inclusion has to be driven by banks because we know how to regulate them, and should not be driven by a new ecosystem that does not have an existing bank as the lead; (b) it has to be offered below a particular price point which is defined either by some fuzzy-logic comfort level or by a mandated number based on somebody’s test of reasonableness (not the […]

Innovate India’s Way To Modernity

In fact, the newer markets of the world often create a “champion’s disadvantage”, because most champion companies are prisoners of their past success formulae. They are far too deeply vested in every way in the religion and the ritual that they have built so far and the risk of change is real. The same applies to western academia, who have built knowledge based on the experiences of global businesses. Their predicaments are understandable. But it is puzzling why Indian business executives and thinkers, who do not carry any such baggage, don’t think differently and originally. Perhaps, we need to reflect on whether there is an incumbent advantage or disadvantage for reigning champions of the developed world. If they have an incumbent disadvantage, then the new kid on the block (Indian business) is not a challenger risking a bloody nose but a leading-edge innovator. It’s what CK Prahalad calls the “next […]

Drunken Man’s Walk