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Banking the Unbanked
Rural environment is formulated by low density of population, low infrastructural facilities, low literacy, low investment, low income and low savings. Till now, many banks are trying to capture this 185 million customer market through different perspectives. Even the Government of India is eagerly joining the hands with public and private sector banks for the same. Yet, banking for the unbanked has still not reached the expectations. We actually want some kind of a theory that actually penetrates into the rural segment as what happened in the case of Mobile Phones.
According to me, start with the intense market research and divide the segment into three parts:
Well-off people in rural areas who are looking for better returns on their investments.
Middle class people who won’t mind investing in the bank if they gather confidence in us.
Lower segment and very poor people who cannot invest but are looking for loans.
From the above segmentation, we can see that the profit margin in the first segment is much higher than the second and third. We can outsource second and third segment and independently deal with the first segment.
Phase I: Contact the local NGO or MFI who is most active in that particular area as these NGO’s knows the current state of mind of the rural people and ask these NGO’s for the channel partners. It is much difficult for us to generate confidence in farmers as we are new to them so that part will be solely done by NGO who is like the part of their family. Now, they can either recruit extra people from the local bodies or can divide the work task among them depending upon the population of that market. These agents are given small handheld devices for carrying banking transactions which is transmitted and uploaded to the main branch at the end of the day. There is no need to carry this device by every agent. Only those agents require this who are handling segment two as...