Financial inclusion is a crucial goal for socioeconomic development. Dvara KGFS recognises the significance of addressing financial literacy and inclusion, particularly among rural women, who are increasingly taking on roles as breadwinners within their families, writes LVLN Murty, Managing Director & Chief Executive Officer, Dvara KGFS in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).
Could you share some insights into the challenges you’ve encountered while expanding your services in rural and underserved regions and the innovative approaches the company has adopted to overcome these challenges?
In expanding their services in rural and underserved regions, DVARA KGFS has encountered several challenges. However, they have also adopted innovative approaches to overcome these challenges and ensure effective financial inclusion. Some of the challenges they may have faced include:
1. Lack of financial awareness: Many individuals in rural areas have limited knowledge about financial products and services. DVARA KGFS, through its onfield Wealth Managers, strong rural Branch network, Digital Agent network and Direct Telecallers continues to build financial awareness, educate our potential customers about the benefits of various financial product offerings and make the right decisions with regards to their financial well-being.
2. Infrastructure limitations: Rural areas often lack proper banking infrastructure, access to banking/financial services. DVARA through its deep rural penetration strategy and its omnichannel approach has been able to overcome these challenges.
3. Low income and irregular cash flows: Many rural customers earn irregular incomes and may not have a steady cash flow. DVARA KGFS helps the rural customers in planning their financial cash flows through its unique FWR (Financial Wellbeing Report) and through its Wealth Management approach for Rural India.
4. Creditworthiness assessment: Traditional credit scoring methods may not be applicable in rural areas due to the lack of formal credit history. DVARA KGFS has developed a proprietary cash flow assessment methodology to help arrive at the Household cash flows and the creditworthiness of the household. DVARA KGFS also uses the JLG Group lending model to help address this challenge.
5. Community trust and language barrier: Building trust among rural customers can be challenging, especially when dealing with formal financial institutions. DVARA KGFS staff are employed from the community we serve thereby helping in trust creation and relationship building. DVARA KGFS also ensures that the documentation related to the financial products is all available in local vernacular language thereby addressing the language barrier.
To overcome these challenges, overall DVARA KGFS has therefore adopted several unique and innovative approaches:
1. Localised approach: DVARA KGFS likely employs local staff who understand the community’s needs and can communicate effectively with customers.
2. Group lending: Implementing Joint Liability Group ( JLG) loans fosters a sense of community responsibility and reduces the risk of default. This approach leverages peer pressure to ensure timely repayments.
3. Doorstep banking: DVARA KGFS may provide doorstep banking services, allowing customers to access financial services without traveling long distances.
4. Digital solutions: Leveraging digital technology, such as mobile apps and UPI, enables DVARA KGFS to reach customers who lack access to traditional banking services.
5. Financial literacy programs: DVARA KGFS likely conducts financial literacy workshops and awareness campaigns to educate customers about financial concepts and the benefits of their products.
6. Flexible products: Designing flexible loan products that align with and help address different financial needs of the rural population.
7. Empowerment: DVARA KGFS may empower rural women by offering financial products that help them access credit and build their economic independence.
By combining these innovative approaches with a deep understanding of the unique challenges faced by rural populations, DVARA KGFS can effectively expand its services and promote financial inclusion in underserved areas.
Financial inclusion is a crucial goal for socioeconomic development. How does Dvara KGFS contribute to promoting financial literacy and inclusion in the communities it serves?
Financial inclusion is a crucial goal for socioeconomic development. Dvara KGFS recognises the significance of addressing financial literacy and inclusion, particularly among rural women, who are increasingly taking on roles as breadwinners within their families. Women’s growing interest in finance is evident as they emerge as key contributors to household income and show a proactive approach to financial planning.
One example that highlights this positive change is Shahnaz, a successful Wealth Manager from Gomia Branch in Jharkhand. Despite facing challenges and working odd jobs after her graduation, Shahnaz’s determination led her to participate in the training offered by Dvara KGFS. Today, she serves as an inspiration to her community, advocating the importance of financial stability for women. Shahnaz’s journey exemplifies the transformative power of financial literacy and empowerment, especially for rural women.
In the last 15 years, Dvara KGFS has laid a comprehensive foundation for financial well-being in rural India, focusing on four key building blocks: Plan, Grow, Protect, and Diversify. For rural women, Dvara KGFS offers a range of products that align with their financial needs and aspirations. These products not only provide financial access but also foster financial literacy and empowerment.
What role do you believe these initiatives play in the overall empowerment of individuals?
Financial independence and literacy are crucial for women, especially in rural areas, where they are gradually becoming primary contributors to family income. Dvara KGFS recognises this paradigm shift and actively supports the financial well-being of rural women through a range of products and initiatives.
In the last 15 years, Dvara KGFS has pioneered a holistic approach to wealth management in rural India, encompassing planning, growth, protection, and diversification. This approach is particularly important for rural women who seek to secure their families’ futures and achieve their financial goals.
For example, Dvara KGFS offers joint liability group loans, jewel loans, crop loans, cattle purchase loans, and cattle maintenance loans. These products are tailored to address the unique financial needs of rural women who often have limited access to traditional banking services. These unique products make Dvara KGFS a preferred choice among rural women, enabling them to access credit for various purposes.
The importance of financial literacy is evident in Dvara KGFS’s efforts to educate women about the significance of creating financial plans. By empowering women with the knowledge to plan for their financial future, Dvara KGFS enables them to take control of their economic well-being and achieve their aspirations.
Moreover, Dvara KGFS’s commitment extends to offering Credit products such as gold loans, enterprise loans, home improvement loans and consumer durable loans and Wealth products such as Insurance, Savings, Mutual Funds among others, to support women in growing their businesses, their household, their lifestyle, their independence, and their overall standing in society.
Dvara KGFS also offers the rural women the opportunity to have an additional source of livelihood by making them Dvara KGFS Mitra Digital Agents wherein they represent Dvara in the village and offer the various financial products and services to their customers. This becomes an additional income stream for the household and also enhances their respect and standing in the village community.
Through these initiatives, Dvara KGFS is not only promoting financial inclusion but also playing a pivotal role in enhancing the financial literacy and independence of rural women. By equipping women with the tools to manage their finances effectively, Dvara KGFS contributes to their empowerment and the overall socioeconomic progress of rural communities.
Can you provide examples of how the company’s client-centric approach has not only enhanced its financial performance but also improved the livelihoods and well-being of its customers?
Customised Financial Solutions: Dvara KGFS’s client-centric approach involves understanding the rural household through its unique Wealth Management approach called FWR (Financial Well-being Report). The FWR captures details of the household’s income streams, expenses, assets, liabilities, goals, earning members, occupation details, credit obligations, dependents etc and then through a unique algorithm suggests products and services across Credit and Wealth Management to address the households needs and goals.
Enhanced Financial Inclusion: Through the JLG approach ( Joint Liability Group Model) Dvara KGFS is able to penetrate deep into the rural markets that it serves and bring rural customers into the ambit of formal credit and financial inclusion. Dvara KGFS also focuses on New to Credit Customers to help them build a credit history and grow their businesses and livelihoods through tailor-made Credit solutions.
Community Center for the Village: Dvara KGFS branches function as a Community center for the village through its “Branch as a Third Place” program where Customers are encouraged to visit the branches. Our SMEs use this opportunity to add value and educate customers on various aspects of their livelihood, occupation, financial literacy etc.
Improve Livelihoods: Dvara KGFS appoints its deserving Customers as KGFS Mitra Digital Agents for the villages through which they can provide access to various financial products and services for their customers in the villages. This helps in improving the livelihood of the Customers through an additional line of business.
Client Feedback and Iterative Improvement: Dvara KGFS’s client-centric approach involves actively seeking customer feedback and using it to refine its services. By listening to customers’ needs, concerns, and suggestions, the company can continuously improve its offerings to better serve its clientele. This is done through independent surveys conducted by reputed organisations and the learnings / feedback is used by Dvara KGFS to further improve its customer service and its product suite.
Community Development: Dvara KGFS’s presence in rural communities extends beyond financial transactions. The company through its CSR initiatives often engages in community development programs that address broader social and economic challenges. By investing in local infrastructure, education, healthcare, and other essential services, Dvara KGFS contributes to the overall well-being and prosperity of the communities it serves.
In essence, Dvara KGFS’s client-centric approach demonstrates a holistic understanding of its customers’ needs and aspirations. By aligning its financial products, services, and initiatives with these needs, the company not only achieves financial success but also plays a pivotal role in improving the livelihoods, wellbeing, and economic prospects of its customers.
The convergence of technology and finance has transformed the industry. How has Dvara KGFS leveraged technological advancements under your leadership to streamline its operations, enhance customer experience, and ensure the security of financial transactions in often remote areas?
Dvara KGFS has harnessed technological advancements to reshape its operations, elevate customer interactions, and ensure secure financial transactions in remote regions. Our approach to leveraging technology revolves around several key strategies. We have established a resilient digital infrastructure that seamlessly connects our branches, field staff, and headquarters, facilitating real-time communication and informed decision making. Equipped with mobile devices, our field personnel directly capture customer data, initiate loan applications, and conduct assessments, thereby eliminating paperwork completely and expediting processes. Data analytics empowers us with insights into customer behaviors, preferences, and emerging trends, aiding in tailored product offerings and risk assessment. We’ve implemented advanced digital identity verification techniques, including biometrics, to securely authenticate customers in areas where conventional methods may falter.
Our mobile application services grant customers access to their accounts and transactions via their phones, especially crucial in areas with limited physical banking infrastructure. Remote customer support is facilitated through digital channels, guaranteeing assistance regardless of geographical proximity to a branch. We deploy technology to deliver financial literacy programs, utilising interactive modules and webinars to enhance customers’ understanding of financial concepts and decisions. Digital platforms enable online loan applications, expediting approvals and reducing in-person visits. Our commitment to cybersecurity is unwavering, encompassing stringent measures, encryption protocols, and regular audits.
For asset-backed loans such as those in agriculture, remote monitoring technology safeguards our interests by assessing asset conditions and progress. Electronic Know Your Customer (e-KYC) processes and digital signatures simplify customer onboarding, while AI-driven credit scoring models evaluate creditworthiness for customers with limited formal credit histories. This integration of technology has markedly bolstered efficiency, extended our outreach, and enriched customer experiences. Through these advancements, we’ve effectively bridged gaps in remote and underserved areas, maintaining the utmost standards of security and transparency.
Sustainable business practices are gaining prominence globally. Could you elaborate on the strategies the organisation has implemented to ensure the company’s growth aligns with ESG principles while continuing to meet financial objectives?
Dvara KGFS is deeply committed to embracing sustainable business practices aligned with Environmental, Social, and Governance (ESG) principles. Our approach extends beyond financial objectives to encompass societal and environmental considerations. A cornerstone of our strategy lies in prioritising social inclusion and empowerment, particularly for marginalised communities and women. Our transparent operations uphold accountability, ensuring that our clients are informed partners in their financial decisions. Additionally, we actively contribute to environmental responsibility by adopting eco-friendly practices, digital transactions, and resource-efficient approaches.
Our client-centric philosophy goes beyond financial well-being, embracing a holistic socio-economic impact. We invest in employee welfare and growth, fostering a workforce equipped to deliver exemplary services. Ethical corporate governance is fundamental to our operations, maintaining a robust framework that safeguards stakeholders’ interests. Our community engagement is participatory, valuing feedback and involving local communities in shaping our strategies.
Innovation drives our impact, enabling the development of financial products that align with sustainability while fostering positive change. Collaborations with NGOs, government bodies, and financial institutions amplify our reach and influence. We diligently measure and report our social and environmental impact, ensuring transparency and accountability. These comprehensive strategies reflect our unwavering commitment to growing in a manner that resonates with ESG principles, fostering enduring success and benefiting the communities we proudly serve.
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