How These 5 FinTechs Are Improving Financial Inclusion in Rural India
With mobile phones becoming an integral part of Indian people's daily life and with one of the highest internet penetration in the world, FinTech apps have helped India to boost financial inclusion, especially in rural areas.
While Pradhan Mantri Jan Dhan Yojana, a financial inclusion program of the Government of India, and policies of the Reserve Bank of India have expanded banking outreach, data reveals that more than 85% of bank accounts are inactive or have non-active users.
According to the development indicators of the World Bank, a former report states that 64.61% of the working Indian population comes from a rural background.
Bain & Company also states that rural India contributes to almost 50% of the total GDP, making it a significant domain for financial institutions.
Making financial inclusion a reality in rural India
In India, many rural and semi-urban residents lack access to formal financial services. However, FinTech entrepreneurs are changing that.
A huge panel of FinTech startups, not only are providing basic financial services, but are also educating individuals about finances through investment and financial planning articles and videos. Here are five FinTech startups that are actively working on enabling financial inclusion in rural India
1. Jai Kisan
Launched by Arjun Ahluwalia and Adriel Maniego in 2017, this Mumbai-based rural FinTech platform aims to make financial inclusion a reality for rural people and companies. The startup offers digital financial services assistance, beginning with credit for online and income-generating, rural commerce transactions.
Jai Kisan is building a rural FinTech full-stack stage to take care of the financial needs of clients in the country's developing business sectors. The startup is working with 700+ organized and unorganized entities in the space, with an aggregate client base of over 1.5 lakh provincial people, including farmers. The startup raised $30 million in Series A funding in May 2021.
2. BankSathi (social commerce FinTech platform)
BankSathi, through its network of 1.5 million financial advisors recommends suitable financial products to clients in Second and Third cities and remote locations throughout India’s 18000 PIN codes. The company provides product recommendations in a variety of financial categories, such as bank accounts, credit cards, loans, demat accounts, and insurance policies. BankSathi seeks to provide its users with a simple and seamless experience by leveraging technology, thereby empowering rural customers with previously unavailable financial services.
The company is affiliated with more than 60 financial institutions, such as HDFC Bank, Axis Bank, IDFC First, SBI, Kotak Mahindra Bank, and Bank of Baroda. Recently, IRDAI approved BankSathi’s insurance license, allowing it to offer a diverse portfolio of financial products, including the most affordable insurance options for clients in tier 2 and less developed regions.
FinTech startup pSwitch was established in 2020 in Noida as a push for financial inclusion in India, and enables digital transactions in rural and semi-metropolitan regions where internet availability is a challenge. Earlier, the startup worked as a financial inclusion Business Correspondent (BC) with banks in Tier-I to Tier-VI areas and through its tech-empowered agent network.
The startup mission is to make the largest network of last-mile retail locations in India to benefit from financial inclusion, social inclusion, Digital India, skill development, employment, government programmes, and more. Since 2020, it has been offering doorstep banking services including domestic cash transfer, cash withdrawals, prepaid cards, travel booking, central, and state government services like e-district and more
4. Dvara SmartGold
Founded by Jaydeep Banerjee and Sanjeev Agarwal in 2019, Dvara SmartGold is a Mumbai-based microsavings-led FinTech startup, effectively promoting micro-savings to spur and help weaker families create financial safety nets. Dvara SmartGold is a drive of the "Dvara Venture Studio" cohort that encourages entrepreneurs to work towards implementing large-scale change in the financial inclusion space. Around 80 percent of Dvar SmartGold clients are women, with an average investment savings of about Rs 560 every month, whereas the household family pay is about Rs 1,500-2,500 every month.
Dvara SmartGold presently has more than 70,000 clients and expects to open its incentive for 400 million+ underserved Indians by assisting them with saving more through micro-investment funds and accomplishing their financial goals by offering liquidity and security. Recently, the startup raised $2 million in Pre-Series A round.
Propelld is a Bangalore-based FinTech startup specializing in education lending. The company’s main vision is to democratize access to education and drive-up India’s gross enrolment ratio by removing financial barriers to the right education with customized financial products, the FinTech stated.
Supporting the overarching education infrastructure, the company provides personalized loan products based on the course’s end-use and borrower’s profile. Their fully digital hassle-free process is aimed towards realizing the educational dreams of tier 2 and tier 3 students and their families. Unlike traditional lenders, Propelld has a unique underwriting system which looks beyond the credit score and focuses also on the future potential of the student.