Financial Re-Engineering: An Innovative Initiative for Financial Inclusion

Financial Re-engineering is designing of the financial instruments, process and policy customized to the needs of client base. This can help Financial Institutions to move a step ahead in bringing the economically marginalized populace towards prosperity by bringing them actively in financial system. For this financial institutions should concentrate on the problem faced by these clients in availing the finance facilities and should re-engineer the current financial instruments or should innovate new financial instruments to tap the available market efficiently. The study is based on secondary data collected from the recent studies in various parts in India. The research paper discusses the reviews of financial inclusion studies in India to identify how it serves the inclusive economic growth in the country. Also it attempts to suggest certain tools through financial re-engineering and innovations to advance a level in direction of financial inclusion. One such innovative instrument that can be developed by micro insurance companies is providing in kind benefits instead of cash benefits during the claims. Designing composite products that includes a combination of different micro financial instruments can also be helpful for improving the financial inclusion. Digitizing payments is also an important step forward towards financial inclusion.