Rural play fintech organizations are on a revival path, aided by a fantastic monsoon, the government’s fiscal inclusion push in addition to subsidies, along with also an early reopening of the agriculture market.
Businesses providing intermediary obligations, banking and banking solutions to rural clients have noticed a sharp comeback in June and July, by the first shock of their nationally lockdown that attracted supply chains and retailer trade throughout the nation to a standstill.
Furthermore, a record amount of electronic payments are reported on stations run by the National Payments Corporation of India, mostly aided by the withdrawal of many government aid funds in the Jan Dhan accounts of beneficiaries, business players informed ET.
“The lending cycle and disbursements have seen a near ‘V-shaped’ recovery on our platform,” stated Anand Kumar Bajaj, CEO of PayNearby. “Aadhaar payments through Direct Benefit Transfers (DBT) handouts were at an all-time high in June.”
That can be reflected from the NPCI data too.
A total of 100 million trades worth Rs 20,000 crore processed to the Aadhaar-enabled Payment Method in June, against 106 million trades worth Rs 18,000 crore in May.
In comparison, throughout February, a total of 40 million trades worth Rs 11,300 crore were processed on AePS.
AePS is the crucial infrastructure that offers payment railings for obtaining government aid and subsidy programmes for many beneficiaries in both rural and semi-urban places.
PayNearby, a major facilitator of AePS, is currently expanding its catalog of company into credit and insurance disbursements, too through partnerships. Additionally, it has opened a project portal site in tie up with all the Retailers Association of India to deal with work crisis triggered by inverse migration to rural regions.
The portal, which was launched in May, saw over 2,500 migrants getting employment opportunities near their hometowns, as demand for manpower and services picked up, said Bajaj.
There has been increased demand for social welfare pension and insurance schemes under the government’s Atal Pension Yojana, Pradhan Mantri Jeevan Bhima Yojana and Pradhan Mantri Suraksha Bhima, said Seema Prem, CEO of FIA Technology – another village-based fintech company.
Companies are also leveraging the government’s push towards financial inclusion, which has found resonance among villagers due to the financial uncertainty brought on by the pandemic.
“The economic activity in rural geographies have surely seen a better pickup than urban and metro locations,” said Prem.
About 65% of FIA Technology’s network is based in rural districts, she added.
The healthy monsoon amid the ongoing Kharif cropping season has been another encouraging factor.
“Barring some areas of Assam, Maharashtra and Bihar where there have been floods, it has been an encouraging monsoon in most parts of the country,” said Prem.
These trends, however, do not mean the pandemic has not caused lasting damage to parts of the rural economy, where most employment is seasonal and sectors unorganised, industry observers said.
However, they added, these trends are indicative of a broader recovery due to unique characteristics of the rural economy — which has shown better resilience to the disruptions than the urban economy.
“Our rural business is still doing better than the urban but it’s almost flat in July versus June,” said Rishi Gupta, MD of Fino Payments Bank. “Remittances in rural areas are nearly at 60-70% pre-Covid-19 levels, account openings and merchant additions have crossed all-time highs while withdrawals are down by 15% as the government schemes have now run off their course.”
Ketan Doshi of PayPoint India said rural areas have seen increased adoption of digital payment services. “Over June and July, we have seen an overwhelming jump in recharges and bill payment categories,” he said.
(This story is part of a series of articles in association with Facebook. Facebook has no editorial role in this story.)