Financial inclusion is today more than a policy imperative, it represents huge opportunity for banks. Despite formidable physical outreach and rural footprint of Banks, 64% Indians lack access to saving account, 87% Indians lack access to ATMs and 73% farming household lack access to institutional credit. Also, with over 60% population out of the banking and prevalence of non-institutional sources of finance, financial inclusion offers immense potential for banks' to expand their business manifold. In meeting the needs of financially excluded or 'The Next Billion' Customers, the conventional banking approach faces challenges such as huge infrastructure set-up cost, high operating cost and lack of risk mitigation measures. The problem is compounded by lack of appropriate&enabling technology solutions for reaching out to the target segment. Jugaad innovation i.e. a frugal and flexible approach to innovation could provide answers to meeting cost and outreach requirements by leveraging technologies and building complimentary business enablers. Frugal Innovation is a whole new management philosophy which focuses on specific un-met needs as the starting point and works backward to develop appropriate solutions which may be significantly different from existing ones. It is not just about redesigning products; it involves rethinking entire production process and business models.
Working with the guiding principle of Frugal Innovations for Financial Inclusion (FI4FI), Yes Bank is continuously developing innovative business models and forging partnerships for seamless implementation of the same. YES Bank has set its sight on frugal innovations in System, Processes and Technology with a core philosophy, 'If customer cannot come to Bank, the Bank will go to customer'. This has entailed coming up with appropriate products at right place and at competitive price through systemic effort of leveraging ICT and business models. FI4FI initiative includes YES Sahaj Micro ATM, YES MONEY - Domestic Remittance Service&YES Livelihood Enhancement Action Program (YES LEAP).