Can policymakers push financial inclusion through mobile telephony? A qualitative inquiry among Indian “urban poor” during demonetization

• Published date: 01 May 2021
• Author: Dipasha Sharma,Manish Sinha,Pratima Sheorey
• Date: 01 May 2021
• DOI: http://doi.org/10.1002/pa.2451

PRACTITIONER PAPER

Can policymakers push financial inclusion through mobile

telephony? A qualitative inquiry among Indian “urban poor”

during demonetization

Dipasha Sharma | Manish Sinha | Pratima Sheorey

Symbiosis Centre for Management and Human

Resource Development, Symbiosis

International (Deemed University), Pune,

Maharashtra, India

Correspondence

Dipasha Sharma, Symbiosis Centre for

Management and Human Resource

Development, Symbiosis International

(Deemed University), Symbiosis Infotech

Campus, Plot No. 15, Rajiv Gandhi Infotech

Park, MIDC, Hinjawadi, Pune, Maharashtra

411057, India.

Email: dipashasharma20@gmail.com

Funding information

Symbiosis International (Deemed University)

Pune India, Grant/Award Number: Minor

Research Project

Mobile telephony penetration has reached up to the remote location of globe

enabling access to communication to each individual. This communication access and

technology can also assist individuals to gain financial inclusion specifically in emerg-

ing economies like India. This study aims to address the issue of financial inclusion

and inclusive economic growth through the development of mobile penetration in

India. The study targets financially excluded Indian urban poor segment and aims to

address the missing linkages between mobile telephone, digital transaction, and

financial inclusion during demonetization. The study follows qualitative research

design. Qualitative research design aims to address the nexus between financial inclu-

sion and mobile telephony from the demand side. The study conducts 52 in-depth

interviews collected under naturalistic observations from the urban poor segment of

society across major cities of India. Open codingmethod is followed to analyze the in-

depth interviews to assimilate information from various emerging themes. Qualitative

data analysis identifies various themes to understand the usage of mobile telephony

for any financial transaction, financial planning by the urban poor segment. The study

explores various reasons behind financial exclusion of urban poor segment and how

mobile telephonyadoption can be utilized to attain financial inclusion.

1|INTRODUCTION

Countries like India have institutions which are semi-differentiated by

nature. We have modern institutions alongside informal conventions

dictating the economic transactions. On the one hand, the village level

economic system is predominantly informal and on the other, the

urban economic system is predominantly formal. In between, we have

the urban poor,

1

which adopt both the methods of carrying out eco-

nomic transactions. In some transactions, they are supported by insti-

tutions while in other conventions play a role in mitigating their risks

in these transactions. The economist Kenneth Arrow (1962) has

shown us that we should distinguish goods and services by the uncer-

tain contingencies in which they appear. Thus, the transaction of a

same commodity under different predominant institutions makes it

look like two different transactions. Communities where institutions

are not so well developed would reflect a premium for risk which

would be higher as compared to transactions in communities well

supported by established institutions. The data released by World

bank (2018) suggest that while India scores very high on Credit Infor-

mation Index (7 on a scale of 0–8), it does poorly when one looks at

domestic credit provided by financial sector as a percentage of GDP

(77% as compared to 163% in China). Thirty-two percentage of India's

population is urban out of which 13% live below the poverty line

(World Economic Forum, 2015). It is this section which carries out its

economic transactions under a diffused institutional structure. Lack of

proper institutional support explains low levels of domestic credit

along with enhanced risk in financial transactions.

As per the global findex (financial inclusion index), survey report

of World Bank (see Demirgüç-Kunt & Klapper, 2012), India ranked

second in the world on the criterion of financial exclusion after China

in absolute numbers. However, in percentage terms the situation

seems to be better as many African countries are behind India.

Received: 23 April 2020 Revised: 23 June 2020 Accepted: 18 August 2020

DOI: 10.1002/pa.2451

J Public Affairs. 2021;21:e2451. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of11

https://doi.org/10.1002/pa.2451