Count Us In – Aspirations for Financial Inclusion: Understanding Demand for Financial Services Among Low Income Consumers in India

This paper gives an overview of the financial services market for lower income groups in India. It profiles the customer, examines product preferences and current usage of financial services and predicts future product and channel preferences.

The paper is based on a qualitative study, and a quantitative survey of 5000 households in five Indian states spanning across low to high levels of microfinance penetration. Findings include:

• High mobile penetration, but limited ability to use advanced features;
• Low educational attainment levels;
• Moderate business ownership levels among MFI customers;
• Varying levels of ownership for different assets;
• Low formal credit usage, current MFI loan features do not fully meet market needs;
• Low awareness of MFIs among non customers;
• High demand for savings and low usage of formal savings;
• Moderate insurance usage, high demand for life insurance;
• Very low remittance usage and demand;
• Safety and speed major determinants of choice of remittance service.

The paper concludes with recommendations for financial service providers and regulators.