Fintech players are seeing a huge opportunity to touch the lives of rural, unbanked customers, who are yet to experience the benefits that come with financial inclusion.Victor Choi
Three things can be held responsible for making the people of a cash-driven rural India confident to make online financial transactions — the demonetisation drive in 2016, the ecommerce wave, and growing smartphone penetration. This in turn, has led to a number of fintech companies to push the boundaries and innovate, expand, and personalise their services to specifically suit the challenging Tier II and III markets in India, where accessibility is still a major issue.
For customers in Tier II and III cities, financial inclusion is a watershed moment, of sorts. They are dropping their apprehensions about how or where their money is going on an online platform and getting used to making small and big-ticket payments with just one click on their phones. Banking will never be the same again in rural India with this big wave of digitisation, and it is this switch, this eagerness of the people of rural India to try out something new that is the biggest boon for the fintech industry.
Looking at this evolving mindset of rural Indian, it is no surprise that the Indian fintech software market is likely to touch $2.4 billion by 2020, according to NASSCOM. For fintech players like us, this is a huge opportunity to touch the lives of rural, unbanked customers, who are yet to experience the benefits that come with financial inclusion.
Every day, a new online payment platform is making life easier for the unbanked rural customer who has to travel miles, sometimes on foot, to make basic electricity, water, gas, etc., payments each month. What if that same customer wants to go one step further and use financial services such as insurance, phone recharges, small loans, instant cash loans or even shop online? Will the long distances and other challenges prevent him from accessing these services? Financial technology can play a huge role to change the way people live in these parts of India.
Rural India is home to millions of small-scale businesses, which cumulatively contribute to the country’s GDP. Financial inclusion will empower them to reach for the sky, resulting in an increasing contribution to the Indian economy. What fintech companies can do for these micro-enterprises is incredible! Imagine seeing successful millionaire entrepreneurs from rural India who have made it big because some fintech company had faith in them and gave them small loans, which they could pay back later?
The biggest roadblock for people of rural India, which prevents them from fully coming under the umbrella of financial inclusion, is lack of awareness and education about what fintech is and how it can change their lives for the better. Most of them don't even know what the digital world comprises. Fintech players are now organising training sessions for their target consumers to ease them into using their services and becoming comfortable with processes.
Making a regional connect by reaching out to people across geographies and facilitating seamless access to financial digital services for them is on top of the list for most players. Offering online services in different regional languages helps break the language barrier, getting new customers to experience the digital platform.
In the next five years, I feel all fintech players will be able to build a thriving ecosystem for the financial inclusion of the next billion unbanked users. They have to focus on continuously staying ahead of the curve and coming up with new, innovative, and productive services for rural India. In times to come, fintech companies will play a critical role in the growth of rural India as an economic powerhouse.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)