Financial Modelling for Business Sustainability

What is it about?

The article highlights the need for measures to accelerate the pace of the business correspondent (BC) model for financial inclusion in India, who act as an nano-entrepreneur. The financial analysis of the existing BCs in India with the existing products and services in practice shows a very diffusive break-even (more than 7 years). The occurrence of such a long-term break-even point can be a potential threat to the sustainability of new and struggling entrepreneurs. The primary investigation found multiple causes such as high cost and low volume of transaction or business for the long break-even. In this context, based on the empirical investigation, the present study proposes an refined model of BC operation for business sustainability, where a BC can achieve its break-even at 3rd year of its business.

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Photo by Andreas Klassen on Unsplash

Photo by Andreas Klassen on Unsplash

Why is it important?

The study gives a fundamental understanding on achieving the business break-even. Therefore, the study can be useful by any entrepreneurs and the bankers and policy makers such as RBI and other institutions in particular to revisit their existing structure of BC model of banking operation. As an outcome, the entrepreneur can identify possible avenues for developing a sustainable business strategy. However, in specific, the findings of the paper suggests some of the possible avenues of refinements in the existing BC Model of financial inclusion, which can be beneficial for both lead banks as well RBI and other institutions in achieving the sustainable development goals.

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