Thursday, February 19, 2009

Views: Banking for un-banked?

I have been thinking quite a bit lately on what innovation could mean to the mass market at the bottom of the pyramid. A lot has been written about the bottom of the pyramid in recent years, that the next level of growth will come from this market. I think this is evident from the emergence of Indian economy.

Take for example my self; I come from that strata of society that had seen so much less banking facilities, all by virtue of the economic levels I came from. Today after ten years I am in a good job and now there is a whole set of banks chasing business from me because I have shifted my economic orbit. I think there is a whole generation of Indians today who are very frequently shifting their economic orbits because of the sustainable growth in the economy. And this, is further fueling the growth that has already set in. But, if you think from the bank's perspective, has this change come because of any innovation from bank’s side to reach to those different levels in the society ? I do not think so, this has come more because of the change in levels individuals have seen personally. Even today there is whole section of society that sees so little banking facilities offered to them. Well, Its well known that innovation in banking services is least when compared to other areas like mobile telephony, may be more because of the economic risks involved resulting in a conservative approach to innovation. So what can these innovations mean for the mass ?. One example I can think of is micro finance. How the class, who need tiny capital on a daily basis to sustain their daily trade? If I can get a quick funding of Rs.4000.00 ($80) to take delivery of vegetables or my supply of raw materials for a few days, just there at the market where I am going to close the deal, it would be a great service. If I can find someone just there whom I know can fund me in minutes through a mobile payment. Or I make a call to that person who knows me personally and he sends a sms for completing the transaction. This market I feel has a potential to generate a whole new generation of banking products and services. Any comments ideas are highly appreciated !
...Read more