entrepreneurs in the first place. the answer i got was not entirely expected : in nine out of ten cases, women had become entrepreneurs to send their kids to a ‘ top, english medium school ’, or to have extra monies for private coaching so the child could excel in the state - level exams, or to get the kid to learn some computing and programming as that is where future jobs lie! collage of the images as these images flashed across my eyes, i realised that rather than being entirely compartmentalised, these images were all linked, that there was a connection between finance – my day job, and these images that my mind had been subconsciously gathering in mornings, evenings and during holidays. an important link was established from financial inclusion to education of children – from micro finance for women entrepreneurs to them sending children to schools, the children in turn having their “ aha! i did it!! ” moments in reading and counting, and to their taking off for the limitless sky and beyond. access to finance is the lifeblood of an economy. its judicious allocation is known to unlock opportunity and growth. it can, in fact, aid even the most fundamental reform for growth by supporting, directly or indirectly, the education of our children, the skilling of our youth, and lighting up of their minds with fire and imagination so they can propel themselves, their families, and the rest of us, forward. education is perceived by many families as ticket to the ride that will catapult them out of economic stress. leaving aside minor exceptions, as a rule education is indeed a ticket to such ride. a mother taking up an enterprise to shape her child ’ s future has all the willingness to pay her debt. as the child grows, her needs too will rise. she will need a clean credit record to be able to borrow again so as to finance her now bigger liquidity requirements. this way, there is full incentive compatibility between her and the finance provider. besides her willingness to pay, the deft handling of her enterprise, induced by the necessity to keep buying the education ticket over time, will strengthen her ability to pay. at any rate, the financier can start with a small loan, use a short tenor to assess repayment ability, and open for her a bank account that can help track other payment flows and improve credit assessment. the reputation of the woman entrepreneur as a borrower can build swiftly as she keeps repaying and enable her to secure

more credit over longer tenors. borrowing as part of a group reinforces the strong incentives to repay ; default by a borrower when all others are repaying can lead to stigma. conversely, encouraging of defaults by some can lead to vitiation of the otherwise rich credit culture. the financier, in turn, can make a healthy spread over own cost of borrowing funds, even accounting for some losses from early defaults, upon whose realisation the entrepreneur can be rationed from future loans or offered only stricter loan terms and tenor. this way, the availability of micro finance for micro entrepreneurs thrives and benefits the society all around. 2 so let me turn from these images to my day job at the rbi and what efforts we are undertaking to help ensure that micro credit becomes available to more borrowers ; micro finance provided a robust foundation ; micro enterprise given an additional fillip ; and indirectly, in the process, our children offered greater opportunity for schooling and skilling. public credit registry ( pcr ) – an important step to democratise and formalise credit 3 in an emerging economy like india, it is always felt that the smaller entrepreneurs, mostly operating under the informal economy, do not get enough credit as they are informationally opaque to their lenders who prefer to provide loans to more transparent larger businesses. at some of the student gatherings and convocations, i ended the remarks here by reciting a poem i received from yuvaraj galada on december 22, 2017, called ‘ the invitation ’, written in 1999 by oriah mountain dreamer, that has inspired me immensely. for a fuller treatment of this theme, please see my speech “ public credit registry ( pcr ) and goods and services tax network ( gstn ) : giant strides to democratise and formalise credit in india ”, delivered in august 2018. data as of march 2018 of scheduled commercial banks ( scbs ) from rbi ’ s basic statistical returns ( bsr ) shows that close to half of the outstanding credit is for ticket size above a hundred million rupees and thirty per cent is above one billion rupees. credit penetration is particularly low for micro, small and medium enterprises ( msme ) sector where the ticket size is generally believed to be between one to ten million rupees. even though more than 95 per cent of accounts with scbs are having sanctioned credit limit less than one million each, the amount outstanding on these accounts is only 23 per cent of the total