As of late, there has been an increasing acceptance of the paramount significance of financial inclusion for people as well as households. Within the Indian credit market, a segment that has yet to be fully explored is that of children and their guardians. The provision of credit can serve as a pivotal force in enabling households to attain self-sufficiency and equipping children with the necessary instruments for successful financial development. Through the strategic utilisation of cutting-edge technology, we've acquired the ability to unlock the vast potential of this untapped market and establish a clear pathway to financial stability.
Why is having a free financial hand important for children?
The utilisation of credit is a pivotal factor in determining the overall financial stability and prosperity of both individuals and families. The provision of credit to children can serve as a catalyst for unlocking a plethora of educational prospects, honing their skill sets, and fostering their entrepreneurial spirit. This enables individuals to actively pursue their interests, attain crucial assets, and foster fiscal accountability from a young age. By acknowledging the importance of credit for young individuals, we can strive towards establishing a comprehensive framework that fosters their ambitions and propels them towards achieving their goals.
The challenges faced by children in accessing credit
Historically, the financial industry has predominantly focused on extending credit to individuals of legal age, thereby restricting the availability of credit options for minors. The extension of credit facilities to minors has been met with reluctance by financial institutions, primarily due to apprehensions surrounding the legal frameworks, risk assessment, and financial literacy of this demographic.
The absence of opportunities to access resources and education poses a significant obstacle to the development and potential of young individuals who may possess exceptional abilities or unique perspectives that could positively impact the community. In order to surmount these obstacles, it is imperative to embrace innovative methodologies that harness the power of technology. By doing so, we can expand our capabilities and overcome the limitations that have hindered progress.
Deploying technology for financial inclusion
The advent of technology has brought about a paradigm shift in numerous facets of our everyday lives, and its impact on the credit landscape for young people cannot be overstated. The potential for transformation in this domain is vast and far-reaching, with technology serving as a catalyst for change. Through the strategic utilisation of digital platforms, mobile applications, and advanced artificial intelligence, we have the ability to produce cutting-edge solutions that are tailored to meet the unique needs and aspirations of children. The implementation of technology in financial services has paved the way for a more inclusive approach to credit accessibility for children, irrespective of their socio-economic status or geographical location.
Swiping towards a conclusion: Cashing in on financial inclusion with neobanks
Innovative new-age neobanks play a significant role in fostering financial literacy and independence among children. Through their ingenious solutions, children are empowered to manage their finances at a young age, laying the groundwork for a lifetime of fiscal responsibility. These companies provide children with user-friendly platforms for learning about money management, budgeting, and savings in a safe and secure environment.
Some revolutionary Indian neobanks today are offering highly intuitive and user-friendly prepaid cards that enable children to acquire essential skills in the realm of financial literacy, including but not limited to wise money management, effective budgeting, and astute savings practices. These platforms are designed with the utmost attention to safety and security, ensuring that young learners can engage with the material in a protected and risk-free environment.
Furthermore, it is worth noting that these online services frequently provide a range of parental controls, affording parents the ability to oversee and direct their children's financial endeavours. This feature promotes a harmonious equilibrium between independence and guidance, allowing parents to maintain a watchful eye while still granting their children the freedom to explore and learn about financial management. In a society where financial literacy is essential, the efforts put forward by creative new financial institutions like these are instrumental in moulding a generation of financially independent and self-sufficient individuals.
Dr. Navneet Gupta is the Founder and CEO YPay