Exploring Last-Mile Delivery Models for Financial Inclusion: A Comparative Study of Haqdarshak, CSC, and BC Sakhi
As a student of Master’s in Public Administration, I have been studying the various ways in which government and non-governmental organizations work towards the betterment of society. In this blog, I will be discussing the crucial roles played by CSC VLEs, Haqdarsharshi (Haqdarshak agents), and banking correspondents in providing essential services to citizens in rural and remote areas of India.
CSC VLEs, Haqdarshaks, and Bank correspondents are all important players in the effort to bring financial and digital services to rural and remote areas in India. Each of these roles has a unique set of responsibilities and requirements, as well as different investment costs.
The Common Services Centers (CSC) scheme was launched in India in 2006 as a part of the National e-Governance Plan (NeGP) by the Ministry of Electronics and Information Technology (MeitY), Government of India. The objective of the scheme was to create a network of ICT-enabled, front-end service delivery outlets at the village level for the delivery of various types of services and information to citizens in rural and remote areas of the country.
The CSC model has played a crucial role in bridging the digital divide and providing access to digital services and information to citizens in rural and remote areas. Under the scheme, Village Level Entrepreneurs (VLEs) were selected and appointed by the government to operate and manage Common Service Centers (CSCs) in their respective areas. Initially, the CSCs provided only government-to-citizen (G2C) services such as birth and death certificates, ration card applications, and utility bill payments etc. However, over the years, the range of services offered by the CSCs has expanded to include banking, insurance, education, healthcare, agriculture, and other digital services.
As of February 2023, there are more than 4 lakh (400,000) CSCs (Common Service Centers) in India, and there are over 3.75 lakh (375,000) active CSC centers in India, according to the Ministry of Electronics and Information Technology (MeitY).
Haqdarshaks (या हक़दर्शी) are trained personnel who are part of the Haqdarshak platform. They are typically individuals who come from the same communities that they serve. They receive training from the Haqdarshak team to learn about various welfare schemes and government services and how to assist citizens to access them. They work on the ground and help citizens to access welfare schemes and government services that they are eligible for. Haqdarshaks use mobile and web applications to assist citizens to discover their eligibility for various schemes and services, apply for them, and track the progress of their application.
During a recent appearance on Shark Tank India (Seasson 2 Episiod 6), Aniket Dagar, the founder of Haqdarshak, shared that the Haqdarshak organization has trained around 25,000 agents throughout India, and currently more than 3,000 of these agents are active and working.
The banking correspondent (BC) model started in India in 2006 when the Reserve Bank of India (RBI) introduced it as part of its financial inclusion policy. The model was designed to address the issue of financial exclusion faced by a large section of the population, especially those in rural and remote areas, who did not have access to basic banking services. The BC model involves appointing individuals or organizations as agents or correspondents of banks to provide basic banking services to customers in areas where the banks do not have a physical presence.
The BC model was initially piloted by a few banks in select locations, but it gained momentum after the RBI issued guidelines for its implementation in 2006. Since then, the BC model has become an important tool for achieving financial inclusion in India. The BC model has also been adopted by other countries to address similar issues of financial exclusion.
Bank correspondents, also known as banking correspondents or bank agents, are authorized by banks to provide certain banking services to customers on behalf of the bank. They may be individuals, shops, post offices, or other businesses that are located in areas where banks may not have a physical presence. Bank correspondents offer a range of basic banking services, including opening new accounts, accepting deposits, processing withdrawals, and facilitating money transfers, and also provide some other services such as bill payments, insurance sales, and loan applications. As per the recent FY22 annual report released by the Reserve Bank of India (RBI), the banking correspondence model in India has witnessed significant growth in the past year. The report indicates that the total number of business correspondents in villages has increased from over 11.9 lahks in 2020 to 18.44 lakh in 2021, reflecting the increasing penetration and scale of banking services through partnerships with BCs.
In addition to the growth in rural areas, the report also highlighted a significant rise in the number of urban locations covered by banks through the BC channels. The data reveals that the number has surged to 14.12 lakh in 2021 from 3.24 lakh in 2020, primarily due to higher data provided by a few private banks, according to the RBI.
This data reflects the significant impact of the banking correspondence model in India, as it helps to improve financial inclusion in both rural and urban areas. By partnering with BCs, banks can provide essential financial services to people who may not have access to traditional banking infrastructure.
The eligibility criteria for each of these roles may vary depending on the specific requirements of the bank, financial institution, or state that the individual is seeking to work with.
For example, to become a CSC VLE, you need to pass the TEC-Teleentrepreneurship Certification course and apply for a CSC ID.
To become a Haqdarshi, you need to connect with the Haqdarshak team and apply through their website and they will give you an ID where you can access all the services provided by the Haqdarshak platform and give the benefits to the community.
For Corporate Business Correspondent (BC) in India, the eligibility criteria may vary depending on the specific requirements of the bank or financial institution or state that the individual is seeking to work with. However, UPSRLM BC Sakhi eligibility criteria are as follows:
Age-18–50,
Education-10,
participants can apply for only those Gram Panchayats where she stays.
Overall It is important for customers to be aware of the privacy policy and terms of use of the service providers like CSC, Haqdarshak or Banks they use and to take appropriate measures to safeguard their personal information. This may include using strong passwords, regularly updating their devices and software, and being cautious of phishing or other fraudulent activities.
When it comes to services like Haqdarshak and CSC, they do require a significant amount of personal information. However, in the case of CSC, we are sharing data with CSC Vle, Indian Government, and possibly other government agencies. With Haqdarshak, we share data with Haqdarshak agents, the organization itself, and the government since they provide government schemes to citizens. It is always better to share information with fewer people to minimize the risk of data breaches.
I believe that sharing personal data with the government is a better option compared to sharing it with private companies. The Indian government has a more secure data security policy, and they already have access to a lot of our information.