Through a project which is being directly monitored by Prime Minister Narendra Modi’s office, millions of farmers daily wage workers and other beneficiaries and various government welfare schemes will soon get access to the organized credit.
To lead the development of the digital network which involves a bank, fintech companies and fiduciary intermediaries working in the tandem to right small-ticket loans to bottom of the pyramid borrowers through the existing direct benefit transfer (DBT) infrastructure and the multiple sources which are directly aware of the matter, for this the government has commissioned a new project named Kashi by Niti Aayog. This is the project which was in consultation process from the past two months, but now it has gathered steam with the government think tank led by its CEO Amitabh Kant presented two prototypes forming the key cog model to the Prime Minister Narendra Modi for reviews on last Friday in a virtual meeting.
The prototype includes a network of the top lenders on the Jan Dhan network which are now coming together to create a DBT based digital lending protocol which is called Cash over the Internet or the Kashi. The details based on this are yet to be finalized while the repayments on these loans will be created in such a way that the future DBT inflows to the beneficiary borrower’s account will be deducted every time they access to credit. The main idea behind the Cash over the Internet is to address the mismatch between the expenditure and the income of people who get assured income every month by the way of DBT, but none is ready to give the credit.
An official said that the Kashi model is a model of microcredit based on a pattern of repayment for the under bank of the country. Under various DBT schemes in an account of this project, the government will partner with the banks which will decide the repayment terms based on the individual account history and money flow in the upcoming months. An official said that the decision regarding the credit amount and the terms of repayment will be prerogative of the banks and there can be a varying degree of flexibility on it. And the second prototype is an integrated Know Your Customer data sharing protocol is called the KYC Setu which is used by the financial institutions including the insurance companies to vet the credentials of a prospective bottom of the pyramid borrower without repeat authentication.