To appreciate the curvature of the political economy, consider the data points. India’s population of 1,311 million is served by 1.34 lakh bank branches. Two thirds of India lives in 5.9 lakh villages, which are served by 50,000 branches. Take the largest states. Uttar Pradesh with 150 million persons in 97,942 villages has 7,370 “rural” branches. Bihar, with over 90 million persons in 39,015 villages, has 3,037 “rural” branches. Considering that over 800 million people live in rural India, the ratio denies, or at least delays, access to the financial inclusion.
A quarter of a century ago, Indians waited years for a telephone connection, thanks to poor policy, costs and last-mile connectivity issues. In the 90s, India opened up the sector; technology brought with it the facility to skip the landline cycle and young entrepreneurs created the infrastructure.