U.S. Secretary of the Treasury Jacob J. Lew is in India this week to participate in the U.S.-India Economic and Financial Partnership, meet with business leaders, and help further our cooperation on economic issues important to both nations.
While in Mumbai yesterday, Secretary Lew visited a Unique Identification Enrollment Center in Koli Village, a small fishing community. These centers, established by the Government of India across the country, have already provided identification for and helped establish bank accounts for 750 million Indian citizens.
India’s Unique Identification (UID) project has the potential to transform India by integrating its population into the formal economy through technological innovation. Before the launch of this program, more than half a billion people in India had no official ID, making it impossible for them to open a bank account, receive government aid, get a loan, or even obtain a driver’s license or health insurance.
Secretary Lew met with several women at the center in Koli Village to receive unique identification, sign up for a bank account, and learn how to make a deposit. The Secretary also spoke with women who had previously enrolled themselves through one of these UID centers to learn about how their access to financial services helped them actively participate in the economy. They explained that their husbands do the fishing while they sell the fish in local markets. Previously, they would give any money earned to their husbands to deposit into bank accounts, but now following their enrollment, they are able to deposit their earnings into a bank account, save for themselves and their families, and make financial decisions for their households.
This initiative underscores the importance of financial inclusion and how increasing active participation in a society’s economy helps promote growth and prosperity. Financial inclusion is a high priority for the U.S. Department of the Treasury. Not only is financial inclusion an important goal in and of itself, but it is increasingly recognized that financial exclusion can be a factor in preventing countries from reaching their full economic potential. At the household level, financial inclusion enhances the ability to smooth consumption, manage life’s risks, and take advantage of economic opportunities such as starting or growing a small business. Also, from a broader macroeconomic perspective, studies show that financial inclusion has a direct bearing on national economic growth rates and is inter-related to the issues of financial stability, integrity, and protection.