Digital banking: How this fintech model is financially empowering rural India

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India is currently struggling to battle the socio-economic fallout caused due to the ongoing Covid-19 pandemic. Amid these critical times, digital/contactless banking has emerged as a significant aid for practically every industry thriving in the country. The citizens have come to value the importance of online payments and virtual banking more than ever during the Covid-induced lockdown since the past year. Over the past few years, India has witnessed a boom in the fintech industry. Factors that have contributed to the industry’s growth includes govt policies like the introduction of Goods and Services Tax, focus on financial inclusion and, of course, demonetisation. However, the last-mile financial connectivity remains one of the key challenges for fintechs today.

In the age of a massive technology influx, this task doesn’t look entirely impossible. What new technology does is that it creates room for endless possibilities and opportunities. It plays a vital role in not just promoting financial products in remote areas but also allows you to become financially literate and in control of your money. Apart from this, it also facilitates better implementation of ideas. As the pandemic has limited human activities, fintech startups are implementing ways for villagers to adopt the cashless and contactless processes of money transfer.

People tend to underuse banking facilities because of a series of issues – a traditional and nervous mindset about money, distant bank branches from residence and limited financial literacy. Now, companies like Fincare Small Finance Bank, Ezeepay, BANKIT and JaiKisan are aggressively working towards financial inclusion and digital banking in the countryside.

Fintechs are fuelling rural banking

Doorstep banking has become a season favourite, thanks to Covid-19 induced lockdown. For example, Ezeepay, a Delhi-based fintech startup, was launched in August 2018 to push financial inclusion and take banking to the rural doorsteps of India. To fulfil this aim, Ezeepay launched Doorstep Digital Services (DDS), Pan India. They have been successful in partially achieving their vision with a strong network in north India.

“The concept of Ezeepay DDS is to make banking easy and accessible for rural India as well as areas that lack rural banking facilities. We aim for all-round development in rural areas because it’s the key to bring both rural and urban Inda at par with each other,” said Shams Tabrej, founder and CEO at Ezeepay.

He added, “Our services are entirely technology-based and easy to use hence it is easily accessible to people using modern-day technology. Our services are app and website based and we have our dealer network across entire north India, making Ezeepay services accessible for all the consumers.”

Similarly, three-year-old Mumbai-stationed Jai Kisan is attempting to bring financial services to rural India, where commercial banks have single-digit penetration. The startup has developed its own business model, ‘Bharat Khata’, that helps individuals and businesses to get access to affordable financing. In fact. they ensure to use a part of their investment for agri-inputs and equipment and other income-generating purposes and enablement of rural commerce transactions.

Loans Services

In this context, Fincare Small Finance Bank has recently introduced community banking to its core customer segment spread across 38,809 villages. This new initiative aims to provide a banking experience at the customer’s doorstep. This facility offers financial services like savings and loan products, life, health and non-life insurance, old-age pension and need-based investment solutions.

Ezeepay also provides small group loans to rural women to help them set up their businesses. “We offer small group loans known as Happy Loans, only to women to help them set up their businesses. The group should of minimum 10 women and the loan amount varies from Rs 10,000 to a maximum of Rs 25,000 per woman. The repayment time of the same is on the weekly basis. This is a way to how Ezeepay is helping in women’s empowerment in the rural areas,” Tabrej said.

Fintechs: Safety and security?

Safety and security are two of the biggest concerns associated with fintech lenders. Traditional banks ride high on their long-lasting legacy that speaks volumes of their credibility and customer satisfaction. However, fintechs have their own strengths. The eligibility criteria, paper work and repayment rules are relaxed and customised as per the requirement of the customer. But the flagbearers of this emerging phenomenon in the financial sector must live up to their reputation and promises for a lasting future.

“We take care of our safety and privacy of customer’s is our top priority. We use audited servers and software’s. Both the server and the applications are certified from the respective certification authorities. We are executing our platform on secure platform which is our https. We do not store any kind of data, we just process the transaction and transfer the data to the bank. Once the transaction is complete the data is auto deleted,” Tabrej assured.

The road to financial inclusion in India is long, dusty and tiring. But, a combination of fast-paced technology and willingness of entrepreneurs to promote financial literacy to the last mile seems more hopeful than ever today.