How technology and rural India turned rural fintech into a success story

The fintech business has seen a significant increase in its consumer base in recent years, not only in major cities but also in rural areas. The first difficulty in providing digital services at the doorstep of individuals is building trust. Initially, rural India, a traditional cash-driven economy, struggled to trust fintech companies’ digital activities. Rural residents found it difficult to trust a fintech that has no physical presence with their hard-earned money. However, a few fintech companies were willing to take up the challenge of overcoming such barriers.

Increasing Internet users

In India, the number of internet users in rural areas is growing more than three times as fast as the number of urban users, according to research by the Internet and Mobile Association of India (IAMAI). The situation has improved significantly as a result of the emergence of creative technology-driven solutions, the use of broadband internet and consumer readiness for digital financial services. Internet and smartphone use in rural regions has increased visibly. Urban areas have seen an increase in internet usage, but rural India has also now gained ground thanks to affordable mobile broadband connections provided by Indian telecom companies. Thus, the current smartphone user base in rural areas has helped FinTech firms to provide cutting-edge and accessible online platforms to facilitate banking.

Nanopreneurs

Rural fintech players have revolutionized the lives and livelihoods of the people of India. They have made several changes to their digital product offerings to encourage awareness and adoption among rural customers, aiming to address the key issues faced by rural customers. They developed a new business strategy that involved hiring potential customers. This is done to stimulate adoption among rural customers.

Regardless of gender or other social categorizations, they promote the spirit of solopreneurship among the population while providing them with economic and technological training. The nanopreneurs, for their part, assist by offering important financial services.

As a result, the emphasis has shifted from being on urban regions first to being on rural first, with rural areas now serving as India’s main growth engines. Such initiatives succeeded in forming strong, trusted personal connections while creating employment opportunities for the community. The fintech representatives are now familiar figures in consumers’ neighborhoods and communities.

Local bankers

Technology is no longer just a tool for small-scale business issues. Today, technology is behind building bridges between rural and urban areas.

Equipped with cutting-edge technology and a desire to promote equitable development, these fintech companies have paved the way for rural India to gain greater access to financial services. The fintech sector has developed a new operating model known as the “agent model,” which enables neighborhood store owners to serve as bankers in their communities.

Local shopkeepers provide their customers with easy cash withdrawal services that can be used with Aadhaar Enabled Payment System (AePS) and Money Transfer (DMT) services that can be used with just the customer’s mobile and account number without going to their bank. Local shops are being transformed into digital financial service hubs for people living in remote areas. Lives of people living in rural areas are made easier thanks to instant prepaid recharge of a variety of billers from a single location, instant travel and accommodation bookings, insurance services, investment goods and several other digital payment services.

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