Rural Banking Intitiaves - Smart Cards

Now Banks have come up with the idea of using Smart card in rural areas The customer in rural areas would be issued smart cards which could be used at point-of-sale machines installed in the shops and offices of partners of the banks. Customers will be able to deposit or borrow money from the machines, obviating the need to establish new branches or ATMs. The transaction details will be stored online and updated on the card. ICICI banks initiative has been documented in an article in Forbes.

The advantage of these smart cards according to back is that it would eliminate the need to have ATMs and branches, one more attempt to find ways out of the heavy cost of servicing the village consumers.

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Rural Banking Intitiaves - Kisan Credit Card

Banking service is an among the essential services needed by rural consumers. Traditionally it is the village money lender who has been fulfilling this role . The interest rate charged by the money lender would be very high leading to chronic indebtedness of villagers. Credit at reasonable rates of interest is essential for the village economy to grow and enable them to join the Indian growth story. Farmers have their specific credit needs which are tied-up with their farming cycle and festivals and functions.

Over the years many initiatives have been started by banks and other institution's in which Micro Credit has been one which has received a lot of public attention.This post would not focus on micro finance , but would rather focus on the initiatives taken by public sector and private banks in mainstream banking. One initiative which created a lot of news a few years back was the introduction of low cost ATMs, but it's scaling-up is taking more time than anticipated. Both IITB and IIT M had developed their prototypes, with the idea of providing connectivity through existing ICT initiative replacing cards by using biometric identification. Maybe the idea needs time before it can be scaled up.

One of the initiatives is considered to be a success is the Kisan Credit Card launched in 1998-99. In the initial five years of the programme itself the close to 435 million cards were issued with credit disbursals of Rs 1,11,459 Crore.The main feature of KCC that it was initially meant for timely short term credit needs of farmers and the credit delivery mechanism was simplified and made flexible . The farmers were provided crop loan, later on the scope was extended to term loans for agriculture and allied activities and a reasonable component to meet the consumption needs. Though the KCC has the word card in it, but it was essentially a passbook given to the villagers like as is the case with normal bank accounts.

The latest in rural banking is the smart cards.........

More cars in rural india

The previous blog on rural marketing spoke about the sales of Alto and Maruti 800's in rural India. I got an interesting news item on the sale of SUVs in rural India "Rural India driving high-end car Sales" thought I should share it.

Rural Marketing Case 1 : Maruti in Overdrive mode in Rural India

MUL has started targeting the rural markets aggressively, with an ambitious rural marketing drive. It has tie-ups with Regional Rural Banks for car finance. The campaign which started early this year , has started showing results. The rural sales figure stands at 2,700 cars and generated about 20,000 inquiries through its rural scheme. The break-up for the cars shows 50% of the cares sold were Alto and 20 % Maruti 800. The success is attributed to the increased focus on these markets and the appointment of Rural Sales Executives by dealers. The number of Rural Sales Executives is at 1500 and many more will added according to the company sources. These Rural Sales Executives belong to the same area and are stationed there itself. Through this the company is aiming at improved interaction and more conversion and improved comfort level with the sales personnel.

Apart from the dealer network the company has been an active particpant in the major Melas in the rural areas. Last one year has seen the presence of Maruti in rural melas like the Kisan Mela (Ludhiana), Sonpur Mela (Bihar), the Kila Raipur Sports Mela (Punjab) and Pushkar Mela (Rajasthan). The Melas provide both a platform for demonstration and improving product awareness, but also to book cars. One the schemes offered in the Melas included booking a car for only Rs 500 (plus three silver coins given free per booking).

Thus in this case the company is using both it's established dealer network and also Melas where it can meet many people who cannot be reached by its dealer network. Through this the company is able to address the 'accessibility' issue of rural markets, and by employing local sales people it is trying to address the 'acceptability' issues.