Better Than Cash Alliance Network: Explained

Published on Saturday, December 24, 2016

Introduction

The move towards cashless economy in India has its roots from Jan Dhan Yojana triggered through UN’s Better Than Cash Alliance Network

Background

  • Better than Cash Alliance Network is an initiative of United Nations Capital Development Fund (UNCDF)
  • UNCDF is the secretariat of the alliance based at United Nations
  • It is a partnership of international agencies, companies and countries
  • Alliance is funded by Bill and Melinda Gates foundation, Master card, Citi foundation, Visa, Omidyar network and Ford foundation

Aims and Benefits

  • Aim is to help countries to make a transition to electronic or digital payments
  • Alliance promotes inclusive growth
  • It reduces poverty by helping nations to benefit poor directly
  • The alliance promotes financial inclusion
  • It enhances digital finance
  • Reduce costs for countries
  • Women empowerment
  • Increases transparency levels

Implications for India

  • Better than Cash Alliance fueled the world’s largest financial inclusion system of Jan Dhan Yojana in India
  • Helped open about 180 million accounts in a year accumulating to $3 billion in deposits in India
  • Brought nearly 300 million Indian citizens under formal banking sector in 3 years
  • The financial inclusion along with Aadhar identification will help in identification of beneficiaries to provide subsidies
  • The LPG subsidy is a major success in India through DBT saving $2billion to GOI annually
  • India can enhance its research and technology by joining in the alliance
  • India gained a policy partner through the alliance
  • India is a great case study and success story of Better than cash alliance

Conclusion

  • India has benefited a lot from the alliance in the recent demonetization scenario
  • GOI has partnered with the alliance to make a change to cashless economy 
  • It has improved transparency levels to a great extent by bringing most of the financial transactions under formal banking sector
  • Alliance has given India the required infrastructure and technical expertise to change to a cashless economy
  • The alliance has helped India develop a digital economy
  • Creating awareness and changing the attitude of the Indians from traditional to modern methods is a big challenge
  • India is progressing to a cashless economy despite facing a lot of hurdles and challenges
  • UN Better than cash alliance is an aid to India’s “Digital India” Mission
  • Overall, India is changing with the partnership of the UN Better than cash alliance

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