Economists and policy makers say mobile agents like Ms. Yashwant — who also are employed in countries like Brazil, Mexico and Kenya — represent one of the most promising ways to help the (rural) poor save and protect their money. Many people in India who do not have bank accounts, for instance, buy gold (necklaces) or simply keep cash in their (unlocked) homes.
“This is something that could be powerful,” said Abhijit V. Banerjee, an economist at the Massachusetts Institute of Technology who wrote “Poor Economics: A Radical Rethinking of the Way to Fight (Global) Poverty” with Esther Duflo.
The banking agents enable the poor to easily save money they otherwise might be tempted to spend, Mr. Banerjee said. And when times are (lean), people could withdraw money they had saved, instead of borrowing cash at high rates of interest. The accounts earn currently earn 4 percent (annual) interest, which is standard for savings accounts in India. There are no (maintenance) fees or charges for deposits or withdrawals.
“It’s true that this will not make them rich,” Mr. Banerjee said, “but it will make them less likely to face (starvation) someday.”
Ms. Yashwant is one of an estimated 60,000 of what Indian bankers call “business correspondents,” who are not bank employees but earn commissions that the banks pay them for each (transaction).
The Reserve Bank of India, the country’s (central) bank, began the push for banking correspondents about five years ago. After slow initial growth, the central bank predicts the ranks of (correspondents) will more than double, to 126,000, by March. The Reserve Bank has ordered (commercial) banks to set up correspondents in every village with more than 2,000 people and has assigned each of those villages to one bank or another.
