Financial Inclusion – Role of Business Correspondents, Business Facilitators (BCBF Model) – Its Efficacy (2024)

FAQs

What is business correspondence and its role in enhancing financial inclusion? ›

Business Correspondent agents not only facilitate access to basic banking services but also promote the adoption of digital financial solutions. They assist customers in opening digital savings accounts, issuing debit cards, and educating them about the benefits of digital transactions.

Financial inclusion intends to help people secure financial services and products at economical prices such as deposits, fund transfer services, loans, insurance, payment services, etc. It aims to establish proper financial institutions to cater to the needs of the poor people.

The person or institution appointed as Business Correspondent (BC)/Business Facilitator (BF) will function, as an extended arm of the bank's branch, in the area. A BC or BF will be an intermediary or a bridge between the bank and the targeted people.

Business Correspondent & Business Facilitator - TJSB Bank.

Business Correspondents (BC) are permitted to carry out regular transactions for customers on behalf of the bank. Business Facilitator (BF) are only responsible for spreading awareness regarding banking and bank's products, helping the bank in business generation activities, and recovery of bad debts.

The importance of business correspondence lies in the fact that it is the formal way of exchanging information by which professional relationships are maintained between organizations, employees, and clients. Since it is in a written form, it can serve as a future reference for the information being communicated.

Fundamentally, the business model of a bank is simple: it is about granting credit and collecting deposits. While banks may look very similar to the public (or to their non-bank competitors!), they are in fact not all the same.

The most sufficient multiples for bank valuation are the price-earning ratio (P/E) and the price-to-book value ratio (P/BV).

A business facilitator provides the business expertise with the knowledge and the resources they need for the business to function. One example of a facilitator is a freight forwarder. A freight forwarder is an individual who links purchasers to exportation companies in exchange for a small facilitation fee.

Business correspondents are bank representatives. They help villagers to open bank accounts. Business Correspondents get commission from bank for every new account opening, every transaction made via them, every loan-application processed etc.

What is the difference between BF and BC? ›

According to the guidelines, while the BCs are permitted to carry out transactions on behalf of the bank as agents, the BF can refer clients, pursue the clients' proposal and facilitate the bank to carry out its transactions, but cannot transact on behalf of the bank.

Communication Strategies and Financial Inclusion

Several scholars agree that appropriately designed and delivered communication strategies can lead to predetermined desired outcomes. For instance, according to Kuchi (2006) organizations which use communication strategically gain support for their corporate initiatives.

Business correspondents are bank representatives. They help villagers to open bank accounts. Business Correspondents get commission from bank for every new account opening, every transaction made via them, every loan-application processed etc.

Accounts correspondence is a written statement about an account, making payments, or other financial exchanges.

Business Correspondent is an extended arm of the Bank Branch who is providing Financial and Banking services to the customers in unbanked and underbanked areas.