The partnership will establish a Micro Pension Visa Financial Inclusion Lab as an incubator of innovative payment solutions, targeting 140 million low income, unbanked, informal sector individuals, providing them with access to affordable, micro-savings and pension products from regulated financial institutions.
Uttam Nayak, Group Country Manager - India and South Asia, Visa, said: "With a current elderly population of over 100 million that is set to nearly double within the next decade, it is imperative for India to establish an inclusive institutional architecture and encourage the workforce to set aside a part of their present incomes for their old age and other social security needs."
"We are delighted to partner with Micro Pension Foundation and through the Lab we propose to create solutions that inculcate and channelize savings. The pilot truckers programme is one such example.
"The truck drivers and cleaners due to their nature of employment have intermittent incomes, and a concerted effort to educate them on the benefits of saving regularly for old age has been undertaken through the Lab's financial literacy centre set up at Sanjay Gandhi Transport Nagar in Delhi.
"On a daily basis, 20 drivers get educated on the programme and we look forward to tracking the progress of enrolments."
Gautam Bhardwaj, Managing Director of IIMPS and co-founder of the non-profit Micro Pension Foundation, said: "As the policy and regulatory efforts with long-term micro-savings gather further momentum and begin succeeding at scale, millions of everyday Indians will need a secure and convenient mechanism to channel potentially tiny pension contributions, month after month over multiple decades, to regulated fund managers.
"This will directly impact both voluntary savings discipline and the amount of pension that subscribers get in their old age. Secure and well regulated technology-based, cashless payment solutions will therefore be a key ingredient for India's success with its pension reform programme. This joint research and development initiative with Visa will actively focus on this area."
Stephen Kehoe, Head of Global Financial Inclusion, Visa, said, "Everyone has the right to have access to safe and secure financial services - and the technology exists today to make this a reality. We are excited about the potential that this partnership offers in terms of providing micro pension products in India and believe it could serve as a model for other countries.
"It is a great example of how we can use Visa's payments network and our partnerships to support a visionary pension program that the Indian government has initiated. It also illustrates how the private sector can work collaboratively with the public sector to promote an important government initiative, which will support broader financial inclusion goals."
--IBNS (Posted on 10-10-2013)