Beyond the gloss and malls of urban India and the beyond the salaried class and organized sector is a big opportunity for those who try. But it is no ordinary consumer group. One has to tread carefully, innovate and reach out in order to gain their business. Businesses in India are finally trying to reach out to rural India and the unorganized sector. They are training their guns in a bid to reach customers beyond urban India and the organized sector. ITC, HLL were probably the first big movers in this arena. Then we saw the mobile phone service providers go all out in a bid to attract rural India/bottom of the pyramid and now we are seeing innovative methods from other companies to reach out. Here are some more developments.
ICICI bank is moving to adopt the kiosk model to get in touch with rural customers.
The bank has decided to set up at least one touchpoint within every 3-5 kilometres of rural and semi-urban areas. The touchpoint could be in the form of branches at the district level, franchisees at the block level and kiosks at the village level. The bank is planning to start at least 50 branches and have at least 8-10 franchisees for every branch and an equal number of kiosks against one franchisee.
The channel is designed in a hub and spoke structure with full service bank branches being the hubs and rural internet kiosks acting as the spokes. Kiosks are owned and operated by rural entrepreneurs, thus ensuring a high level of customer interaction.
The other one is a UTI pension plan for the unorganized sector.
UTI MF has tied up with the Shree Mahila Sewa Sahakari Bank Ltd (SEWA Bank) and 25,000 members of the institution have joined the pension scheme.
Expressing happiness at the bold decision taken by members of SEWA, Mr Chidambaram took a dig at government servants, saying that while the common women of Gujarat had reposed faith in the market by trusting their earnings with UTI Mutual Fund, bureaucrats have been insisting that their defined contribution pension accruals should be invested only in Government securities.
Looks like the preferred route to enter rural areas, like in Project Yeshasvini, is through SHGs and micro finance groups.
Following SEWA Bank, at least 30 micro finance institutions have committed to enrol their members in the scheme.
From Economic Times on the same scheme,
For a minimum contribution of Rs 50, women working with SEWA (Self Employed Women’s Association) are being offered a pension plan, under which they can contribute throughout their life to a pension account and start drawing a pension when they retire.
UTI has shown that not only is it possible to bring the unorganised sector into the pension fold but also make it commercially viable,” says Gautam Bhardwaj, director, Invest India Economic Foundation. SEWA Bank is getting an intermediary fee (typically is 2-3%), which they normally get.
There is a pot of gold at the bottom of the pyramid. More power for such initiatives. Hopefully more such initiatives will see the rural population seek jobs beyond agriculture and into ICICI kiosks, ITC Sanchalaks and so on.