Fintech companies are pushing the boundaries of what’s possible in Tier II and Tier III markets in India. This is a huge opportunity that comes with financial inclusion to touch the lives of the unbanked rural customers, who with fintech’s technological innovation are personalizing and expanding their businesses to serve and impact millions of lives. Rural areas are yet to see better accessibility and proper social and financial inclusion.
But the scenario has improved because of three events that have allowed fintech to actually impact rural cash-driven customers in India. These are:
- The 2016 demonetization movement.
- The wave promoting e-commerce.
- Penetration of smartphones.
This promoted the proliferation of fintech industries catering to the rural sector by bringing new payments processing platforms, online transactions, and smartphone internet banking to the rural customers who far outnumber the urban clients. Let us quickly explore how the fintech industry has actually touched the lives of these people.
The watershed moment:
Rural customers in Tier II and III cities are dropping their mistrust of the online movement. The demonetization drive of 2016 meant to root out black-money saw India as whole embrace digitization of financial transactions. Coupled with the thrust of the government to boost the fintech sector and the push for financial inclusion, the watershed moment came with better penetration of the rural segment where banking transactions were yet to make a mark.
And yes, the smartphones were also instrumental in rural people trying and finding digitized transactions more transparent, safe and easy. Banking will never revert to the same again after this wave of digitization and technology impacting the rural customers.
According to NASSCOM reports the 2020 forecast of the fintech software market in India is expected to be USD 2.4 billion.No wonder then the figures reflect the changes in the pulse of digitizing the fintech way the tier 2 and 3 cities of rural India.
Reading the rural pulse of India:
Rural India contributes in big ways to the GDP and industrial development, as it is an untapped market and home to many businesses of the small-scale variety, which when cumulatively looked at, do contribute substantial millions to those GDP figures. Empowering the rural people with financial inclusion can not only improve these figures but provides a huge exploration area for entrepreneurs with a rural background.
The internet and online payment platforms are today making everyday life simpler and easier for the rural client who has to travel to far-off locations just for bill payments and banking. The unbanked rural segment is also seeing an improvement in billing and supply of water, electricity, gas, daily commodities procurement, etc.
Many e-commerce platforms, online banking, financial services like insurance, recharge for phones, small loans, shopping online has changed the face of rural India and the way they access and spend their money. This is the right ambiance for fintech industries to take their business up a notch and cash in on the largely untapped rural markets and thus improve the lives of millions living in those areas. Just stop for a moment and imagine the micro-enterprises getting instant loans and contributing collaboratively to the fintech sector.
Role of education:
Education is the key factor that can bring about financial inclusion. To change and impact more lives raising awareness and education is the only way to go. And the fintech industries are doing a good job through training camps and awareness sessions of their products and services in the rural markets.
To take it up a notch, regional language-based apps are being introduced to ease the rural customer onto the online platforms. These two measures are not only profitable for the enterprises undertaking them, but also impact the millions of rural persons living in the unbanked locations and geographies across India. Bringing the rural people into seamlessly using the fintech platforms, has been and continues to be, an area of prime interest to the fintech sector in its thrust aimed at taking the benefits of technology to these locations.
Over the next decade, we can expect to see the fintech contributing to improving a lot of the unbanked rural sectors. This move will improve the industrial growth, the GDP and also impact positively the rural millions who are yet to see the major benefits of financial and social inclusion on all fronts. Fintech industries need to stay ahead of the curve and focus on products and services meant for rural clients. Do you want to learn how you can be a part of this revolution?