With every step taken, we are moving ahead toward more advancements and innovations. But are we doing it right? Moving ahead but are we taking everybody alongside? Well, yes!! Gone are the times when development was meant only for tier-one cities. Today it’s about Bharat, the unbanked Bharat, the unaddressed Bharat, the best of Bharat. The rural-urban divide between India and Bharat has now become two different identities. This has helped in shifting our focus towards the rural segment and the utmost need to empower and make Bharat self-reliant. It has been widely noted that most policies and steps are focusing on urban areas and their growth, which kept rural areas excluded from India’s growth story.
Digital payments in India have experienced a new positive curve but only among the modern population. In August 2021, UPI clocked a record-high of 3.55 billion transactions worth Rs 6.39 trillion. While these figures paint a promising image of India’s digitalisation, the picture is currently incomplete. Why? Because most digital transactions and new technological developments in India are concentrated in urban centers and serve the consumers living in the metros. With a low level of digital literacy and access, India’s rural heartland still struggles to become a part of India’s fintech revolution. However, this is not the end as the picture of India’s financial inclusion landscape is not completely gloomy. We are yet to tap into our full potential in rural India and we are already on the way.
Literacy, awareness, and gap: Let’s bridge it?
Cash still rules the market in our country, especially in Tier II, III, and rural India. With the rising demand for new products from these areas, there is also a huge gap in providing the access to consumers. Even though the country has taken huge steps toward the adoption of digital, it is important to note that rural India still has miles to go. Communication barriers, what can they lead to? Misunderstandings or no reach at all. It is imperative to have a direct communication medium or converse with them in their language to establish trust and transparency as Bharat is a land of various languages and cultures people appreciate conversing in their local language.
Fintech’s are moving towards new technological advancements and trying to bridge the banking gap in underserved regions. This is proving to be a game changer with the rise in its financial literacy and awareness campaigns. Now it is not about an isolated issue that impacts a particular region but now it is more about taking up the responsibility to benefit everyone and empower them to create the real Bharat.
New-age technological developments in fintech have created an impact on the financial well-being of consumers and economic equality. The big task at hand is not only to come up with solutions but also spread awareness among the unbanked people. Fintech’s carry the responsibility of providing financial literacy and creating awareness in real Bharat through various programs and training. All these advancements together are progressing financial education and basic finance awareness to take Bharat towards financial inclusion and a poverty-reduced path.
Why is bank account another name for touch me not in Bharat?
The penetration of smartphone availability in rural India experienced a sharp rise from around 37 per cent in 2018 to 68 per cent in 2021 as per one of the industry reports. The availability of mobile phones has opened new doors when it comes to banking and online financial services. But what is still holding our Bharat back?
The number of internet users has grown to 350 million in 2021 in rural India compared with 340 million in urban India as per various reports available in the market, keeping social networking and chatting as the top activity across India with over 500 million active internet users. Whereas online banking and digital payments have been identified to largely happen only in the affluent metros and urban India. In rural India, more than 80 per cent of people who are having Internet use it mostly for social, calling, and videos. It is not surprising to see social networking being the top activity across India with 500 million active internet users. But total active users watch videos accounting for about 430 million out of which 53 per cent are from rural India. Surprising, isn’t it?
Despite the 56 per cent of active internet users belonging to rural India, online transactions remain to be dominated by urban consumers. Up to 80 per cent of Indians now have a bank account but financial inclusion is still a far-fetched dream. Despite the availability of mobile-banking services and bank accounts the account holders in these remote areas are still holding themselves back from availing of all these services. The goal of fintech should be to develop technology and integrated networks which can drive a change in the behaviour of consumers residing in underserved parts of India.
Laying the foundation of democratised, self-empowered Bharat
The government empowered the unbanked population through Pradhan Mantri Jan Dhan Yojana (PMJDY) by opening bank accounts. Most of these bank accounts are not used for banking and financial transactions. The government empowered the unbanked population through Pradhan Mantri Jan Dhan Yojana (PMJDY) by opening bank accounts. Most of these bank accounts are not used for banking and financial transactions. As per the latest data, almost every fifth Jan Dhan account is ‘inoperative’ throwing light on dormant and zero transactions. As per a report, the percentage of people in India with a digital bank account stands at 39 per cent and will go higher to reach 46 per cent by the end of 2027, but only 2 per cent of the population owns a mobile money account, as per the Global Findex data.
In current times, the common person can transact—24×7. The financial landscape is accessible at the click of a button and in a real-time affordable manner. The multiple challenges of lending, paying, borrowing, investing, and on top of that worrying about security have been addressed with the introduction of different innovative technologies in the past. The idea of insurance and its mere understanding is a foreign concept for the rural population. Rural India is closed off when it comes to buying insurance, taking loans, or in that case making any investment digitally. FinTechs need to tread carefully by building trust, adapting technologies, and educating consumers.
Many technological advancements are up and here for every individual from every nook and corner of the country but the users in rural Bharat perform no action, withdrawals, or deposits showing how the formal banking system in rural India is still a long-lost dream. There must be more awareness around using bank accounts for their own comfort and better services. As when we look at the data, most of these services and financial actions are performed largely in Tier 1, 2, and metro cities which remain the cream population enjoying all the benefits offered by the latest FinTech technologies. By introducing lighter versions of these online services apps, providing multiple language options, an easy and efficient process, and well-built trust, all these factors can help in establishing equality when it comes to accessing financial services.
With it, on it, all for Bharat!!
FinTech players today are on a mission to democratise services and the advantages of the modern world for Bharat for their easy access. They are working beyond and onward to provide the technology and focus on increasing the merchant network so that these merchants can help in serving local customers. The regional state governments are working to provide financial technology and infrastructure to support rural financial inclusion as the use of local-level resource persons (Bank Sakhi) has helped in taking steps towards financial literacy and organising different awareness campaigns to spread the word and make Bharat self-reliant and empowered.
People in rural parts are aware of mobile usage and have access to the internet which directs us toward the capability and potential it holds to grow. With strong merchant networks, participation, and financial awareness we can create real Bharat. There’s still so much to do and fintech is all set with new advancements, training, and new solutions designed exclusively for the rural population. FinTechs are also creating job opportunities in rural India and equipping them well with the knowledge of digital means by providing modern services, conducting surveys, and identifying people’s changing needs. The government, banks, and fintech companies are working towards promoting financial access in rural India by spreading digital empowerment, introducing customised products, and delivering financial inclusion to the last mile.
With more advancements in technology and solutions, the need of the hour is to create Bharat-specific financial products to help and empower the unbanked rural population. When it comes to the urban-rural divide the disparities are endless, but the real India is not in the cities; it is in our villages. No, they are not distant. But in fact, our rural India is closer, away from the hustle-bustle of the city. Keeping our focus steady on making our rural India more self-sufficient, with faith and new advancements, here we aim high and take even a higher leap onwards and upwards.
Views expressed by Asif Khan, Marketing Head, Manipal Technologies Limited.
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