Financial inclusion means providing affordable financial services to all individuals and businesses, irrespective of net worth and size. It offers an accessible platform for people to participate in the financial sector. Many developed countries have stronger GDP growth rates with high-income equality and one of the main factors responsible for this is financial inclusion.

Current financial situation…

As per the research conducted on financial inclusion, the Global percentage of adults who have a bank account is ~62% whereas, in India, it is close to 53%. Thus, India is far behind the global average. Government initiatives such as Pradhan Mantri Jan Dhan Yojana has given the required boost towards financial inclusion. Still, there is a last-mile gap to be filled, which includes taking banking infrastructure to remote rural places in India.

“The nearest ATM is 2km away from here. The road is also not proper. I have to pay 30/- for one-way travel to get money from the ATM, deposit cash or pay EMIs. Everyone can’t easily transact using banking apps here in this village, and we also don’t have adequate resources.

It becomes very hectic at times to do the basic transactions”, said Ramesh, a local farmer. 

Understanding the need

BFIL sensed the need to solve the last-mile gap and improve financial inclusion in India. Several factors affect when developing a solution in such a diversified country e.g. cultural and economic diversity, dispersed markets, where even dialect changes every 60 km of geography. It requires an open mind and a creative approach to engage rural consumers.

With technology and innovation being the key, BFIL leveraged established platforms such as AEPS and UPI introduced the concept of Bharat Money Stores and its Retail Distribution Service Point (RDSP) platform. RDSP is a new-age financial services hub through which customers can perform banking transactions such as withdrawals, deposits, cash@POS, etc. They can also pay EMIs, transfer money to bank accounts, or even buy consumer durables.

The solution

The digital platform is based on the Aadhar Enabled Payment System (AEPS) where customers can perform basic banking transactions. For example, if a customer wants to deposit money into a bank account, he/she needs to show his aadhar card and scan the fingerprint. Everything happens through an app available with the Bharat Money Store merchant and connected to the core banking infrastructure.

Apart from providing banking facilities through RDSPs, a customer can also buy consumer durables. The product range available includes mobile phones, sewing machines, clothing irons, etc. The merchants can earn incentives, varying on the transaction type, done by the customers. Another innovative feature of RDSPs is that merchants can borrow from other merchants in case of insufficient cash to disburse to the customers. The app locates all the merchants in the vicinity who have enough cash available or any other items, accordingly, the customer will be directed to the merchant for seamless operation. 

There are 15,000+ merchants registered with the Bharat Money Stores in 7000+ villages. The platform gets 4,00,000+ monthly transactions. There is a huge opportunity for other businesses to partner with BFIL to leverage this network to introduce new products catering to customer needs in rural areas. Insurance companies may introduce OD and TP products. Other MFIs and banks can provide loans and other banking services. The platform can be beneficial to other industries such as payment services, consumer durables. Retail and e-commerce companies can expand their delivery network through RDSPs.

The journey ahead

This is the beginning of a new era where we aim to achieve 100% financial inclusion by providing digital financial services. Through this project, merchants equipped with basic smartphone and software, can create hyper-localized banking opportunities for locals and also empower underprivileged women, thus revolutionizing the direct rural reach