Financial inclusion as a mission is at a crossroad. The equation that defines the process of inclusion is stated to be as follows Financial inclusion = financial awareness + access to finance.

The roadblocks to the process of inclusion have so far been the access to the deprived section of the people by the financial institutions. There have been various reasons for that. And the globally accepted one is the inability of the traditional channels to satisfy the needs of the poor due to the way they are built to function.

Necessity is the mother of invention as they say. The most effective way was hit upon in Africa. The villages there are not only inaccessible in some parts, but even if they were accessible, due to preponderance of theft, in parts of the continent, it was not even safe to carry cash across the street.

The challenge there led to the evolution of the digital wallet. It not only revolutionised the transaction system in Africa by extending the wallet to transfer to the remotest corner of the African states making life easier. Gradually it evolved into a number of financial transactions, including remittances and micro credit.

It turned out to be a game changer in the fight against financial illiteracy. World Bank became a big advocate of digital financial reach and India jumped into the band wagon. Fortunately now the penetration of digital technology is reaching out to the unreachable very fast. With digitization, it is becoming easier to reach the left out segment with financial products. Now let us get back to what we started with. The financial inclusion model has awareness as an essential and necessary condition. Unless the deprived ones are aware of the access, availability of products is of no use.

As we have already mentioned in passing about the failure of the traditional financial channels to take the inclusion model forward due to their structure, the role of microfinance institutions become so important. The microfinance institutions by the very nature of their activities interact with their customers individually. The handholding of the clients necessitated by the way loans are given out and risk minimised requires of them to educate their customers in financial ways. The step in the process is of course for the industry to embrace the technology and use it to gain deeper penetration.

In a new India that is poised at a point of inflection, microfinance institutions are also transforming themselves by adopting to the scopes being opened up by the digital technology and become more effective.