Artificial Intelligence and SHGs: Enabling Financial Inclusion in India

Artificial Intelligence and SHGs: Enabling Financial Inclusion in India

Vinay Kandpal, Osamah Ibrahim Khalaf
Copyright: © 2020 |Pages: 13
DOI: 10.4018/978-1-7998-5068-7.ch015
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Abstract

For inclusive growth and sustainable development of SHG and women empowerment, there is a need to provide an environment to access quality services from financial and non-financial agencies. While banks cannot reach all people through a ‘brick and mortar' model, new and advanced banking technology has enabled financial inclusion through branchless banking. By using artificial intelligence in banking, banks have a cost-effective and efficient solution to provide access to services to the financially excluded. Digital technology improves the accessibility and affordability of financial services for the previously unbanked or underbanked individuals and MSMEs. A big data-driven model can also be helpful for psychometric evaluations. Several psychometric tools help evaluate the applicant's answers which aid to capture information that can help to predict loan repayment behavior, comprising applicants' beliefs, performance, attitudes, and integrity.
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Introduction

Artificial Intelligence (AI) is creating a buzz across the world. In the sphere of finance and technology, artificial intelligence has demonstrated its merits by creating an option of faster, cheaper and better transactions. Artificial Intelligence in the financial and technology sector has already made inroads in India in the past decade. It is said that this will alter and bring in huge transformation for a variety of applications.

According to studies by KPMG, “the Indian Fintech market is expected to grow at a CAGR of 22 percent over the next five years, with the transaction value crossing $73 billion by 2020”.

The Internet is more or less accessible by the majority of the people in India, which depicts an amazing opportunity of artificial intelligence to step in. Reports suggest that, “Financial services are influencing more than 300 million users by enabling them access to credit, while the same users are completely ignored by traditional players due to insufficient credit history” It was recently found in a study that, 52% of the customers utilise fintech services in our country. In the year 2018, India emerged as a great market for the fintech options. India is home to 1.3 billion people with diversity in language, culture, belief and lifestyle. This at times may pose as a challenge. Hence, it is important that fintech services are available in easy and lucid manner in several languages so that people from every nook and corner of the country can avail it with ease. Fintech believes in providing a satisfactory user experience and it is a mandatory criteria.

All the companies should strive for using artificial intelligence which will transform the way services are dispensed. The seamless service through artificial intelligence will bring in accuracy, automated and immense speed. These factors will mean that it is preferred by the user as the visits to the bank will reduce and transactions will be just a click away. In order to access credit from any financial institution it is understood that fintech will aid in completing all the formalities digitally. There is no reason to visit the bank and fulfill the paperwork. “The borrowing process happens in a snap, and the overall experience is now seamless” (Anantharaman, 2019).

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