“Financial services sans Banks”
In the hinterlands of Bihar, Jharkhand and Delhi-NCR where there are no branches of any banks, the average India citizen still has access to financial services. Secure financial transactions and life insurance are now available at your neighborhood store and on your mobile. Financial services like these have been a boon to the citizens of these regions since 2007 thanks to the efforts of Abhishek Sinha. The young entrepreneur’s business venture “Eko” functions on the simple business idea of reduced cost financial services via technology.
Yourstory learnt more about the business idea behind Eko and its founder’s entrepreneurial visions in a fascinating interview with Abhishek Sinha
What sort of financial services does your venture Eko offer?
Eko is based on the fundamental premise of reducing the cost of secure financial transactions and providing an extremely intuitive user interface such that access to financial service can be democratized.
Currently Eko works as a Business Correspondent of State Bank of India, ICICI Bank and as a distribution partner of Bharti AXA Life Insurance. We provide people access to a no-frills bank account and an off the shelf insurance policy that a customer can acquire in less than 15 minutes from a neighborhood store. We also provide the ability for these customers to deposit cash, withdraw cash, remit funds and pay the insurance premium at these local ‘kirana’ like stores – all in a matter of seconds.
Which segment of the populous are your services aimed at?
Eko is not a bank, insurance provider or Micro-finance company. We are providing an infrastructure and servicing layer supported by technology, user-interface and processes that allows traditional financial institutions like banks, insurance companies to extend last mile reach and convenience to small ticket customers – who may be un-served or under-served. To our partners, we bring the ability to reduce the transaction costs to a level that makes it viable to serve this customer.We are presently serving a little over 130,000 customers across Delhi-NCR and Bihar-Jharkhand.
What makes the financial transactions done by your business uniquely innovative?
The following would be the key differentiators:
- Choice of existing, trusted, neighborhood kirana / chemist shops to deliver last-mile financial services
- Choice of mobile phone as a low-cost, always on low-energy consuming connected device for enabling financial transactions
- Number dialing and patent filed security mechanism that allows merely number literate customers to easily conduct financial transactions themselves
- Absolutely no CAPEX is needed for either the customer or the ‘human ATM’ – and extremely low technology cost for the transactions
Is Eko a part of the Microfinance sector?
Eko is not an MFI. We provide an infrastructure and process layer that allows low-income customers to access financial services at lowered transaction costs, without lowering the quality of service. It is incidental that our current customer segment is largely ‘low-income’ users. But the need for small value transactions is universal.
What has been the biggest challenge in getting people to use Eko?
I will list two of our major challenges:
- Getting people (partners) to believe that it is possible to serve low-income customers profitably
- Creating customer awareness and trust: given that ours is a technology enabled service set in a context that is traditionally bereft of technology, it has been a tough journey convincing customers to trust that the service is for real.
We are still some distance away from overcoming the first challenge – and clearly that will take its own time. On the awareness front, we have done a lot of local level marketing initiatives to try and talk to customers one on one. We are now seeing that our financial service provider partners are becoming more open to spending marketing dollars to educate this customer base of the veracity of the services being offered. That will go a long way in helping us.
Who inspired you to become an entrepreneur?
The trigger was a chance meeting with Dr. APJ Abdul Kalam at an Airport. He seeded the thought that as a country of young, enterprising and skilled people, we must look to create wealth. I was very influenced by his idea and concluded that the best to create wealth – and share it – is to pursue an entrepreneurial venture. That led me to quit Satyam and to start-up 6d, my first venture.
Given an opportunity to change the environment that your business works in, what is the one thing you would change?
This is a very difficult question for me to give a specific answer. While there are expectations entrepreneurs train themselves to expect least changes in the environment and still continue to chase the milestones.Which regions are you currently active in? Are you looking at expanding your employee base?
We are currently present in Delhi-NCR and Bihar-Jharkhand with an office in Delhi and one in Patna. We continue to remain quite small so far with only 42 employees – 15 of whom are in Bihar and the remaining in Delhi-NCR. Our model does not require us to add very large numbers of people except in the front-end channel sales function. As such, we have had steep customer growth without needing to add too many people. Once we are funded and look to expand geographical presence, we expect to grow quicker.
Where are you planning to implement your services next? Any foreseeable impediments?
We are currently focusing on getting our templates in place for Delhi-Bihar. We have designed our technology and back-end processes for scale and entered into partnerships with very large players who are best-in-class. The most significant issues to scale will be creating an organization and processes that can handle the stress that comes with scale.
What is the best validation for your work with Eko till now?
Our partnerships are our biggest achievement. The fact that despite being a start-up we have been able to partner with India’s biggest public-sector bank SBI, the biggest private sector bank ICICI, and one of the leaders in life insurance Bharti AXA as partners is very special for us.
I would have to say that the field visit by Mr. Bill Gates in November 2009, and his validation of the principles on which Eko is modeled is the biggest recognition Eko has received.
What significance does the technology platform have in your business?
The most critical aspect of our technology platform is its ability to do simple, secure financial transactions using an ultra-low cost device in real-time. Even now, when one witnesses a live transaction of money being transferred instantly into an account over long distances in seconds, it is a terrific thrill.
We had built on top of an open source platform to start with; but now we have spent thousands of engineering man-hours with partners in fine tuning the platform and integrating it with core-banking systems.
What is your view on entrepreneurship as a life choice?
Entrepreneurship is a journey I would strongly recommend. My advice to budding entrepreneurs would be to commit themselves wholly and passionately to their idea, be open to making a lot of mistakes and unlearn things very quickly, never give up and in the initial stages look towards family to back you financially as well as emotionally.
We at Yourstory applaud Abhishek Sinha’s innovative thinking and entrepreneurial insight. We wish him success in replicating his business model in other parts of India and hope to see him come up with many more business ideas.