Efficacy of EShakti: An Assessment

A growing body of research reveals many developmental benefits arising from digital financial inclusion. Digital way of promoting financial inclusion by targeting Self-Help Groups (SHGs) could be a possible channel for enhancing digital financial inclusion in India. The EShakti project, launched by National Bank for Agriculture and Rural Development (NABARD) in 2015, aims at digitisation of all SHG’s accounts to bring SHG members under the fold of financial inclusion and, thereby, helping them to access a wide range of financial services while increasing bankers’ comfort in credit appraisal and linkage. This study attempts to examine the efficacy of the EShakti project by analysing the role of digitisation in enhancing credit linkage, the quality and regularity of data uploading in the portal, the usage of the portal and the user experience. The study is based on data collected from 35 SHGs spread across seven districts from six states, one each representing six different regions.

The analysis reveals that post EShakti project implementation, the maintaining records has improved manifold. Members have found the SMS alerts useful as they provide transparency in the transactions. However, owing to the non-updating of the mobile numbers, many of the SHG members were not receiving the messages. It has also helped to avoid the occurrence of multiple memberships with mandatory requirements of Aadhar number. However, the quality and regularity of data updating remain a major concern. Many mobile phones or tablets were not in working condition. Data entry was done by the agency after the meeting of the members. Animators were not trained on data entry and many of the entries in the system did not match with the records in the register.

EShakti is perceived as an important tool for borrower verification by some of the bankers. However, the usage of the portal was found to be abysmally low with only 19% of the branches using them. This may be attributed to a variety of reasons like lack of awareness on part of the branch managers, lack of training on the portal and difficulty faced while accessing the portal. Further, the study also reveals a significant positive association between the quality and regularity of data updating and credit linkage.