Promoting rural entrepreneurship to help serve the underbanked sections of the society
The gigantic reverse migration of laborers from cities to the villages, in the initial weeks of the lockdown imposed due to the COVID pandemic, once again highlighted the disproportionate concentration of economic opportunities in the country’s urban areas. Lakhs of migrant workers had to return to native towns and villages, with no source of income in view and the need to carve out a new life for themselves and their families.
Noida based Fintech start-up – BANKIT , like few others in the country, seeing the situation, has been harnessing the influx of human resources in tier 2, 3 towns and villages, and promoting rural entrepreneurship. In the last couple of months, BANKIT has onboarded 15,000+ Digi Mitras (Banking Correspondents) particularly in states such as UP, Bihar, Jharkhand, West Bengal, and Odisha between March-June 2020. Encouraging the AtmaNirbhar mission even in the hinterlands of the country, Digi Mitras are mostly migrant workers who returned to their hometowns from metro cities in hope of finding employment opportunities. Today, these Banking Correspondents are not only able to support their families financially but are also micro rural entrepreneurs, who are flourishing in the comfort of their native place, leaving behind the struggles of city life.
The onboarding of rural entrepreneurs for BANKIT has come at a time when the hinterlands of the country have been several roadblocks in accessing banking facilities. With movement restrictions during the lockdown period and people not being able to step out of their homes to visit banks/ATMs in distant locations, we have seen a huge demand for cash services. Citizens residing in rural India, especially the older generation, are largely unaware of technological developments and hence are mostly dependent on cash as the major source of transactions.
Let’s take an example of a remote village in UP or Bihar, the problems of the community amidst the pandemic are multi-fold, though two things stand out – a) Livelihood opportunities (especially for migrants) and b) banking facilities in light of the low penetration of financial services in the area. BANKIT plays a dual role in creating rural entrepreneurs as well as making relevant banking services available for the community.
To tide over the economic crisis as a result of the COVID pandemic, the government announced an ex-gratia payment of Rs 500 to all women Jan Dhan account holders for three months, starting April. Also, DBT was transferred to Farmers, MANREGA bank accounts. This led to a sudden surge in banking activities in rural India (Over 40-45% in the last couple of months), mostly in the form of cash withdrawals. BANKIT via its network of Digi Mitras has been facilitating key financial transactions for the underserved sections of the society during this time. This helped the vulnerable strata of the society in the timely withdrawal of the subsidy money as a part of the DBT and ensure that they can survive the economic issues created due to the pandemic. In light of the unavailability of banking facilities coupled with the scare of COVID transmission in rural areas, BANKIT assisted over 12Lakh+ people every month during pandemic with their basic financial needs.
Additionally, BANKIT introduced the doorstep banking facility that includes a wide range of services all under one roof at the customer’s doorstep. The company extended its services to the underserved population of the country with their strong agent network who, donning adequate safety gear, visited the homes in their vicinity in rural regions to assist them.
Timely assistance amidst the crisis
Operational mostly in non-metro cities, suburbs, and rural areas of India, BANKIT caters to 350+ districts and covers 4,800+ pin codes. Alongside cash-out services in the rural part of the country, remittances’ were another key service that saw huge demand as a result of the pandemic lockdown. But BANKIT’s mission was still far from being complete. Understanding that there are around 4 lakh villages and many of these are unbanked even today, the company realized that during the lockdown, people ran out of cash and were running to the local money lenders for assistance. BANKIT mooted a product –“collateral-free loan”. Similarly, the company also noted the need for insurance coverage in these markets. BANKIT now offers 2-wheeler insurance cover, life, and health insurance along with some un-conventional insurance products.
To sum it up, over INR 36,659 crores have been transferred using Direct Benefit Transfer (DBT) to the bank accounts of 16.01 crore beneficiaries by the Controller of General Accounts (CGA) during the lockdown period in the country. Leveraging this, BANKIT has played a vital role in offering timely support for not just cash withdrawal but other services as well, to last-mile customers. While BANKIT primarily focusses on rural and suburban areas, the company has also been expanding its geographical footprint and extending its services to urban cities during the pandemic.
For BANKIT, the mission will remain the same – cater to the under-served, create financial literacy, and promote rural entrepreneurs across the width and breadth of the country.