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Samanvay, as part of the annual management festival 'Ahvan' of Indian Institute of Management Indore, is a first-of-its-kind student run social activity to take steps in the direction of enabling financial inclusion as a key economic driver in India's growth story. The students help the nearby rural population get access to no frill banking accounts and health insurance cover at affordable rates.

Samanvay started in the year 2010 when major thrust was laid upon bringing low income labourers in the nearby areas of the institute into the mainstream banking system. Around seven hundred people were provided access to banking accounts and accidental insurance cover. Experiencing the learning curve, Samanvay team in the subsequent year decided to provide under-privileged families an annual health insurance cover of up to Rs 30,000 for a family unit of maximum five persons. The annual premium for this scheme was Rs 450, of which the government contributed Rs 300 for those below the poverty line. IIM Indore students contributed Rs 100 for the first year; hence the insured family had to pay only Rs 50 as the first year premium.

Taking the initiative forward in the current year, Samanvay team has brought about certain changes keeping in mind the original objectives. This year, Samanvay team is contributing only Rs 50 (as compared to Rs 100 last year) towards the annual premium of the health insurance cover for each family unit. Even the government subsidy of Rs 300 to BPL families has been discontinued from this year. Despite the absence of subsidies and lesser contribution from the Samanvay team, there has been encouraging response from the villages which highlights the success of their original objective of creating awareness.

This year, Samanvay team expects the total insured families to be around 500. Till now four villages have been covered with 150 families insured. This number is expected to increase to 300 insured families till the completion of phase 1 of this initiative which is scheduled by October 7, 2012.

The students at IIM Indore believe that rather than poverty, lack of awareness among the people and complicated documentation processes are responsible for the lack of spread of banking and insurance services in the rural part of the country. That is why the main objective of Samanvay is to create awareness about the potential benefits of bringing people into mainstream financial system by providing subsidies and contributions in the initial years. But subsidies and contributions cannot continue forever. They need to be phased out so that people with the ability to pay can take responsibility and continue with the financial system without any outside help.

The next wave of growth powered by demographic dividend has to come from the Bottom of the Pyramid which has more than 400 million people in our country. With only 40% of the people having access to banking facilities, less than 4% having insurance cover and only 26% of the rural population with annual incomes below 50,000 holding bank accounts, financial exclusion threatens the very foundations of our dream of a better tomorrow. Hence, it is imperative to integrate our rural population with the mainstream financial system of the country to unlock its true potential.

Samanvay has been a welcome initiative by the students of the premier management institute who are trying to stir the economy at the grass root level. More such initiatives are needed by various other educational and social organizations to create awareness and propel government efforts to make financial inclusion a reality in the country.

Concluded.

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