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We are poised for a big leapfrog in financial inclusion. Can we manage it well?

(in the next 5 years)…. financial inclusion will reach everyone. Every adult will have a Smartphone, a bank account and Aadhaar number and with one click on his phone he will be transacting, buying, selling and transferring money all that is reality. – Nandan Nilekani (25-Jul-2016)

Jan Dhan, Aadhaar & Mobile (JAM), the new unified payment interface (UPI), savvy banks and new age financial institutions (like payment banks) will soon change the financial landscape of India. Folks in villages & small towns will have better access to money. The poor will receive more direct cash transfers to their banks accounts & easier access to credit. Many new entrepreneurs will come on board. SMEs will be revitalized. More jobs will be created. We all will have more money to spend. We will consume more. India will grow.


That’s a good story and most of it may happen. Thats the beauty of capitalism. Money and business innovation fuel each other.  Money, innovation, profits and more money, more innovation, more profits.

A good story always has villains and that’s the dark side of capitalism. If this big thrust on financial inclusion is not well-managed, financial bubbles and disasters will strike. Such a massive financial inclusion exercise will inspire financial experimentation & innovation. Financial innovations, fueled by human greed & passions, often get out of control.

And like all good stories, the twists & turns will keep us spell-bound. Mini climaxes and anti-climaxes will stun us. The history of capitalism tells us that booms & crashes are inevitable. The system is only as good as the people who manage it.

We don’t seem to have an alternative path. The JAM juggernaut will roll. We need financial inclusion to rescue the masses.

Our only hope is to install the right people in government, businesses & regulatory bodies, and trust these heroes will pull us out of disasters.

JAM trinity & transformation