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“Unlock the insights into SAS 1300, a crucial framework for auditing the social impact of financial inclusion programs, as notified by the Institute of Chartered Accountants of India (ICAI). Delve into the core elements, the process of social audit, key metrics, and challenges, exploring the broader implications for achieving global financial inclusion goals.”

Financial inclusion is a global priority, aiming to provide equitable access to financial services for all citizens, regardless of their social or economic background. The Institute of Chartered Accountants of India (ICAI) is set to notify SAS 1300, a vital framework for auditing the social impact of financial inclusion programs. In this article, we delve into the core elements of SAS 1300, its role in social auditing, and its broader implications for financial inclusion.

As soon as ICAI notifies this SAS, it will take effect.  Implement reforms to provide equitable access to/awareness of/availability of affordable financial services for all citizens, including but not limited to men, women, the elderly, children, and at-risk adolescents, divyang – physically and mentally challenged, specially abled, SCs, STs, OBCs, and regions.

Process of Social Audit

SAS 1300 outlines a robust framework for conducting social audits. These audits scrutinize the effectiveness of financial inclusion initiatives, focusing on multiple data sources, such as:

  • Direct beneficiaries
  • Immediate family members of the direct beneficiaries
  • Management personnel of banking and financial institutions providing services
  • Trainers imparting knowledge/ training/ awareness
  • Funding entities, Government and related institutions
  • Monitoring Agency
  • Key program officials of the entity, etc

When conducting surveys and collecting sample data, the following factors should be considered to assess relevance and reliability:

  • designed by in-house team or external specialized agency
  • conducted by in-house team or external specialized agency
  • number of days taken
  • number of teams formed
  • number of manpower deployed
  • number of villages / districts covered

After data collection, the SA should thoroughly review the data, which can include conducting physical inspections and one-on-one interviews to better understand the situation.

Evaluation question

The SA needs to form evaluation questions that serve as the base of the Social Impact Assessment Report. These questions can range from examining the beneficiaries’ change in financial behavior to their understanding of schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY) and could include:

  • Did the target people receive the benefit?
  • Did they think differently after the benefit?
  • Did they understand the concept and work towards financial planning?
  • Did they start using the bouquet of financial services?
  • Did they learn something they did not know?
  • Did they use / apply the knowledge and gain from it?
  • Did they share it with others?
  • Did the standard of living improve?

Further questions may be included regarding promotion of financial inclusion,

A. Composition of the participants:

  • Whether the program objectives were found to be consistent with the composition of the beneficiaries?

B. Quality of benefits provided

  • How was the quality of services provided?
  • Were the beneficiaries satisfied with the services that they received?
  • Are beneficiaries better informed about their rights, entitlements, and the policies and schemes that affect them viz. National Bank for Agriculture and Rural Development (NABARD), Pradhan Mantri Jan Dhan Yojana (PMJDY), Lead Banking Scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), etc.?
  • Have the services enhanced beneficiary’s standard of living?
  • Has financial planning increased amongst the beneficiaries (All the citizens include but is not limited to men, women, elderly, children, and at-risk adolescents, divyang – physically and mentally challenged, specially abled, SCs, STs, OBCs.)?
  • Have the beneficiaries started using mobile and net banking?

C. Suggestions / Feedback:

  • What were the constraints or challenges faced in providing the services/ programs?

Likewise, there are many other questions that need to be identified by the SA.

Key Metrics: Framing and Assessment

The Social Auditor should go over the project/program documentation in order to develop the evaluation criteria for determining effect. To properly analyze and evaluate impact, such important metrics can be compiled from base-line, mid-line (monthly / quarterly), and end-line assessments (if available) at the beginning, middle, and conclusion of the reporting period / project / program, respectively

  • The baseline measurement is done to establish the starting point in any project/program, which is then used to measure what actually changed due to the intervention of the entity.
  • Assess the past performance trend of the entity.
  • Assess the highlights and key achievements during the reporting period

The Social Auditor could more easily evaluate the following through the review of the project/program information:

  • What would have happened in the absence of the intervention?
  • How much the project contributed to the changes that are evidenced?
  • How much unintended negative impacts happened due to the intervention?

Assessment of evaluation criteria

The Social Auditor needs to recognize evaluation criteria of both Qualitative and Quantitative for assessing the impact.

Some key aspects that can be considered as evaluation criteria are listed below:


  • Number of people having an account (by themselves or together with someone else) with a banking or financial institution along with demographics and geographical bifurcation
  • Number of people with at least 12 deposit and withdrawals from their account in a year
  • Number of deposit accounts opened
  • Number of wallet accounts generated and amount of monetary transactions
  • Number of people with loans outstanding from a bank or financial institution along with demographics and geographical bifurcation
  • Number of insurance policy holders segregated between life and non-life insurance
  • Number of digital transactions entered along with demographical and geographical bifurcation
  • Number of people using mobile banking/ internet banking
  • Number of debit and credit card holders and number of people using a debit or credit card for making payments along with demographical and geographical bifurcation
  • Number of people receiving salaries/ wages through direct transfers into their account


(A) Building knowledge and awareness

  • Financial knowledge score: Understanding about inflation, interest rate, compounding effect of interest, insurance, etc.
  • Financial behaviour: Purpose and utility of savings for emergency funding
  • Ease in accessibility of obtaining loans/ borrowing facilities
  • Quality of services towards grievance redressal

(B) Improvement in Decision Making – Ability to make decisions in household affairs when buying assets for the family, taking decisions on children education, ability to spend independently without anyone’s approval

(C) What was the change experienced by the beneficiary stakeholder?

(D) How long did they experience the change?

(E) Do you see any change in the way society treats you because of your participation in Financial Inclusion program?

(F) Which aspect of the Financial Inclusion program helped you the most? What has changed in your life due to the financial inclusion programme?

Challenges/ Areas for improvement

Based on their suggestions and input, which may have an impact on the impact assessment, the stakeholders’ difficulties and areas for improvement should be identified by the social auditor.

  • Lack of awareness to all the citizens includes but is not limited to men, women, elderly, children, at-risk adolescents, divyang – physically and mentally challenged, specially abled, SCs, STs, OBCs
  • Lack of awareness of rights, entitlements, schemes and entities working to provide financial inclusion
  • Unavailability of adequate funds among non-profits for availing support services from ecosystem entities
  • Security related issues resulting in frauds have the potential to undermine public confidence in the use of electronic payment products
  • Lack of power supply and weak network connectivity
  • Technology related issues
  • Lack of knowledgeable manpower to educate and train people about financial services and their operations


  • Cases of no-response in case the questionnaire is not administered in person
  • Some of the questions being skipped by the respondents and remaining unanswered
  • Non-availability of respondents after completion of the services provided
  • Change in contact details of respondents due to which they could not be contacted
  • Untrained social investigator conducting survey
  • Percentage of error in data

Any significant challenges or limitations observed must be highlighted by the SA in their report.

My Remarks

It is said ““Inclusion is the foundation of financial stability.””. A society can never prosper if the growth does not cover all sects of the society. Social Enterprises play an important part in making sure that benefits of growth and financial prosperity are not limited to a certain few individuals. As a SA our job is to analyse the impact of these social projects. 


Author Bio

I am a Fellow Member of ICAI, Practicing under the banner of M/s AAN & Associates LLP, a firm based out of Kolkata & Bangalore. I am, also registered under Insolvency and Bankruptcy Board of India as a Registered Valuer for valuation of Security or Financial Assets (Passed in Feb 2020) I a View Full Profile

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July 2024