How rural fintechs are driving financial inclusivity

According to the 2011 census, the rural population, accounting for almost 70% of the population of India, consists of around 800 million people who reside in 600,000 villages across the topographical expanse of the country. For this populace, agriculture has been the primary occupation for centuries and it is only over the last few decades that these regions have witnessed some occupational diversification due to the increasing importance of other non-farm-based activities.

Due to a lack of employment and sustenance options in these regions, a sizeable portion of the population also travels to urban centers, as migrant workers. The 2011 census data calculated the total number of internal migrants accounting for inter and intra-state movement to be 450 million, an increase of 45% since the Census 2001. The Economic Survey of India 2017 estimated the inter-state migrant population as 60 million and the average annual flow of migrants between states was calculated at 9 million between 2011 and 2016.

With the onset of the pandemic and the ensuing lockdown, India witnessed a wave of reverse migration, and the rural-urban divide became more evident than ever. It became clear that the need of the hour was to create opportunities in terms of growth and development in the rural sector, to harness the potential of a population that is predominantly young, dynamic, willing to learn, and more than willing to work.

Development in these centers would not only mean more jobs and lesser migration, but would also mean greater access to essential services, like banking, finance, and travel. For instance, a large fraction of the rural population remains underbanked, with only 20 percent of ATMs available in these centers. Rural citizens had to travel miles for getting a travel booking done, or for a simple cash withdrawal from a bank account. While technology has advanced, the benefits have been reaped mostly by the urban centers, while most of the rural centers have been stuck in time, thereby widening the rural-urban chasm.

Technology is no more a tool used to solve limited business problems. Technology in itself is now business. And this chasm of the rural-urban divide is where technology is making a noticeable difference. Purpose-driven companies whose endeavour is to include citizens residing in rural pin codes in a game of rapid evolution, have come to the fore, and are using tech to create effective products & solutions, bringing essential financial services and products to rural citizens. Armed with the latest technology and an intent to drive inclusive development, these fintech players are paving the way for the citizens of Bharat to have better access to essential financial services, earn their way to better sustainable livelihoods, and start living slightly easier lives.

Rural fintech players complement the initiatives of the state and are at the forefront of revolutionising the lives and livelihoods of the citizens of Bharat.Rural fintech players complement the initiatives of the state and are at the forefront of revolutionising the lives and livelihoods of the citizens of Bharat. They foster the spirit of nanopreneurship (nanopreneur: owner of a micro-scale business) among the people, irrespective of gender or social markers, while also helping them with financial and digital training. The nanopreneurs, in turn, help deliver essential services like cash deposits, withdrawals, and money transfers with the help of Aadhaar or UPI to the members of their communities.

In these communities, where smartphone penetration is not synonymous with digital literacy and digital fluency, the nanopreneurs are essential human intermediaries between the regular rural citizen and the tech platforms. Instead of having to migrate to far-flung cities from the hinterlands, these nanopreneurs run their own businesses in a sustainable way, with newfound respect as parallel bankers of their communities.

According to a Statista report, in 2020, the rate of smartphone penetration in India was clocked at 54%. A Deloitte report pegged the rural smartphone market to be growing at a CAGR of 6%. When juxtaposed against the literacy growth rate of 5% over a period of six years, it can be summarised that India in general, and rural India in particular, might witness a smartphone in every hand. However, that doesn’t necessarily imply the utilisation of the device. In reality, the average rural citizen still grapples with digital financial literacy and isn’t comfortable handling applications on a smartphone. This is where assisted rural fintech chips in. With the nanopreneurs as intermediaries, there is human assistance available for the citizens of Bharat, and help is at hand, that too really close by.

Till a year back, most of the citizens of Bharat spent countless quanta of resources, including time, for mundane jobs that their urban counterparts were used to finishing off in a jiffy. While someone in a city booked a bus or a train on an app, from multiple options, selected the best offer available, and completed the booking in a few finger taps, the rural counterpart used to travel for hours to book a bus/ train ticket, travel again in case of cancellations, and more often than not pay a middleman for confirmation. With the recent tech takeover, the rural citizen can now get these basics done with ease, and there are multiple new options for their livelihoods, that help them get a sustained income. This is how, with the help of rural focused tech players, rural citizens, and the rural sector itself, experiencing inclusive growth, is slowly moving up the pyramid of Maslow, and is on course towards harnessing its true potential.

Sanjeev Kumar is Co-founder & CEO, Spice Money

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