Crisil has done most things right with Inclusix, India's first index for financial inclusion. But it is also true that it has failed to capture the full picture.
Inclusix is based on the banking data provided by the Reserve Bank of India. Data from a large network of non-banking financial companies (NBFCs) and micro-finance institutions (MFIs), with over 10,000 branches largely in the rural areas, is missing. They cannot be ignored as their client base almost entirely comprises people unserved or under-served by the formal banking network.
Also, inclusion should ideally involve products like micro-insurance (prominently by insurance companies) and micro-pensions (prominently by NBFC and MFIs). "It does not treat financial inclusion holistically," says Alok Prasad, CEO, Micro Finance Institution Network.
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