Rural fintech firm Spice Money plans to increase its footprint in Telangana, AP
Rural fintech company Spice Money, through its million-strong network of Adhikaris, serves the underbanked and unbanked sections of the rural population in the hinterland where digital skills are in short supply. They help rural citizens make use of important services via digital means. “Spice Money already has its presence in the southern states of our country and in the coming months we plan to increase our footprint in states like Telangana and Andhra Pradesh,” said Sanjeev Kumar, Co-Founder and CEO, Spice Money, in an exclusive interview with Bizz Buzz
How has the growth journey of Spice Money been?
Our journey began with the vision of bridging rural and urban India by unlocking access to financial services for the masses across our country. With the commitment to cater to the underserved rural population, we at Spice Money have taken important steps to provide rural consumers with a range of essential financial services. To provide these services to rural residents and to create additional income/employment opportunities, we are onboarding aspiring merchants/nanoprenuers (we call them Spice Money Adhikaris) and also making them self-reliant and financially independent. We have scaled exponentially with a 4x growth in FY22. We almost doubled our Adhikari network to 1 million, clocked the highest customer GTV in the category at 1.4 lakh crore, and achieved the highest AEPS market share of 16.4 percent in FY22.
We are building a marketplace to cater to all important banking and financial needs of rural residents by offering a range of products. Our Fygital super app combines financial products with the presence of rural nanopreneurs on the ground, who use technology to serve underserved rural communities through an assisted digital business model. With last mile connectivity through our Adhikari network, our Open Network Assisted Digital Distribution (ONADD) model is now able to integrate multiple partners, allowing them to take their services to hinterland India.
What are the essential products and services offered by Spice Money?
We at Spice Money have been committed to addressing the access challenge across various sectors in rural India. We serve the underbanked and unbanked sections of the rural population through our million-strong network of Adhikaris. Our Adhikaris play an important role in the hinterland where digital skills are in short supply. They help rural citizens make use of important services via digital means. These products and services include Aadhar Enabled Payment System (AePS), Mini-ATM, Cash Management, DMT, Bill Payment and Travel.
The near absence of digital literacy has stopped the average rural citizen from using the increased internet and mobile penetration to avail basic financial services. Although almost 70 percent of the population of our country lives in villages, only 20 percent of ATMs are located in these regions, with an average of ten ATMs per village. This meant that the average rural citizen had to travel great distances to access basic banking services, or to pay bills or to manage cash.
With the presence of our local Adhikaris, rural residents only need to reach their nearest Spice Money outlet to get assistance in the process of cash deposits, payments, withdrawals, transfers etc. through digital tools and services like AePS, mATM, cash handling, bill payments , charging and travelling. AePS is a great way to transact with just an Aadhar number and biometric verification, without the added burden of carrying a check book, or remembering bank account numbers etc. AePS also facilitates payments under government schemes like NREGA, pension etc. At Spice Money outlets, mATMs helps with essential services like cash withdrawals and deposits, money transfers, balance enquiry, etc. We also provide travel services that enable rural residents to reach these outlets to avail travel services like bookings, cancellations and refunds, instead of traveling long distances and hours of waiting in line.
How different are rural customers from their urban counterparts?
Over the past decade, India has witnessed an unprecedented rise in smartphone and internet penetration, not just across the urban centers but also in rural areas. This boom has resulted in the emergence of new age technology-led startups that have provided a variety of different services.
The urban consumer has reaped the benefits of this development, with every major transaction, from ticketing to travel, to financial services taking the digital route. All major services are not available at the push of a button, and e-commerce, healthcare, hyperlocal deliveries, travel, entertainment are preferably done via smartphones. But unlike their urban counterparts, rural consumers have not been able to access the benefits of this digital revolution. Although there have been significant developments in internet and smartphone penetration across rural regions, lack of digital skills and skepticism about digital financial services stand in the way of rural residents taking advantage of the technology’s benefits. Through an assisted model with the help of our local Adhikaris, we are able to build trust among the rural residents by holding their hand in understanding each and every step, thereby making them comfortable with the digital processes and technology adoption.
While urban consumers are comfortable working with a plethora of apps on their smartphones, transacting across the spectrum, rural consumers are more comfortable with an assisted approach where their local Spice Money Adhikari helps them with their financial transactions and other essential services.
What are some of the best product offerings and what are the essential products in the pipeline?
Currently, the best products in our portfolio are AePS and mini-ATMs that we run all over our country. Together with this, we are developing a financial market model that goes beyond basic banking and payment services, as well as a travel marketplace that provides comprehensive travel solutions. These products are available to the general public through the Spice Money super app. We are currently developing solutions for agriculture, insurance and credit needs, to name a few, and intend to scale these solutions up for the benefit of people living in rural areas.
Why has Spice Money chosen a Phygital model and what role do Spice Money Adhikaris play in providing secure financial solutions to rural customers?
Due to lack of digital literacy, rural consumers are not comfortable working with a digital interface over financial transactions. Along with a lack of awareness of digital products and services, there is a clear trust gap among this demographic. The rural consumer is more comfortable with an assisted approach where their local Spice Money Adhikari, who is also a member of the local community, helps them with their financial transactions and other essential services, using digital tools.
We train our Adhikaris extensively in digital tools and products as they are seen as trusted banking partners by their communities, who are assisted by Adhikaris in using digital tools to avail essential financial services. We chose a phygital approach to help unbanked areas with physical and digital services for ease of use. This mode allows Adhikaris to work offline for the population who find it challenging to work with apps and websites. Our local Adhikaris with their presence on the ground help rural customers by becoming influencers in their communities and help bridge the trust gap between the common people and the financial service providers.
We are customizing our offerings and making them accessible to consumers because rural India remains a cash economy today, due to the limited ability of banks to serve it. Our network, comprising more than 10 lakh Adhikaris, covers more than 18,000 pin codes, 700 districts, 2,50,000 villages and 5,000 blocks, serving over 10 million households, covering 95 percent of rural pin codes in India. We have recently started a new initiative where our Adhikaris will help our consumers to open a DEMAT account, apply for LIC IPO and invest in future products.
How does Spice Money train its Adhikaris, a state-level dissolution of Adhikaris?
We run our own Spice Money Academy, which is a digital training platform, to provide financial and digital education to rural nanopreneurs in India. This is an industry-first initiative that has the ability to make a big impact on people’s lives. Spice Money Academy organizes several virtual conference calls with industry experts who provide our Adhikaris with the best insights in the industry. We also organize on-ground training sessions by our highly professional and knowledgeable sales team for regular training of our Adhikaris both for existing and new technologies. We have several million strong Adhikari networks across the country, with most of the Adhikaris present in the northern and central parts of India, followed by western and eastern India. Our focus is now on the southern states of the country where we plan to expand using our expertise to solve the problems of people living in these areas.
Top performing markets and emerging markets that Spice Money plans to enter this year.
We have over 20 million transaction customers on our platform every month, with 90 percent of them from semi-urban and rural areas, primarily from Uttar Pradesh, Bihar, Madhya Pradesh and Rajasthan. Our best performing state in terms of market value is Uttar Pradesh, the most populous state in our country with a large population in rural areas followed by Bihar. We already have a presence in the southern states of our country and in the coming months we plan to increase our footprint in states like Telangana and Andhra Pradesh.
