It is truly said that real India lives in rural areas. With more than 65% of India’s total population, rural areas remain a top hotspot for introducing new technology. Fortunately, the government has taken many steps toward introducing new schemes and technologies. Digital transactions are one such step that has transformed lives in rural areas.

Still, most villagers shy away from digital transactions due to a lack of awareness and knowledge. However, this challenge became an opportunity for many state-sponsored and private Fintech companies.

In quest of helping the rural population, these fintech companies have opened multiple branches in rural areas. This article touches on various aspects of how these companies can bring a change in rural areas.

Nine Ways In Which Fintech Companies Are Bringing A Significant Impact In Rural India.

Alternative To Common Banking Services

Gone are the days when villagers had to wait in long queues for several hours to withdraw their hard-earned money. Fintech companies like https://fiaglobal.com/ have empowered local shops with Aadhaar Enabled Payment System (AePS) and money transfer services (DMT).

Customers can easily withdraw, deposit, or transfer money at these shops or common service centers. These centers also offer various types of digital services, such as prepaid recharges, digital payments, and others.

Easy Loans And Microfinance Solutions

The unavailability of credit was the biggest hindrance in the path of economic progress for rural communities. This has now been revolutionized by introducing microfinance and easy loan solutions.

Based on creditworthiness assessed through data-driven algorithms, microloans are offered to individuals and small businesses.

The microfinance solutions by fintech companies have:

• fueled the scope of entrepreneurship
• Farmers are investing in better agricultural practices
• Small businesses are expanding their operations
• Artisans are scaling up their production

Increased Accessibility

Fintech companies have eliminated the need to visit physical bank branches that might be located at far away distances. They have conveniently accessed digital finance services through smartphones and the internet.

Ease Of Use And Convenience

Traditional banking services were time-consuming and involved a significant amount of paperwork. At the same time, the fintech companies have simplified the entire process by offering user-friendly interfaces and easy-to-understand services for rural residents.

Financial Inclusion

Most of the rural communities lacked access to formal banking services. But today, fintech companies play a significant role in bridging this gap between rural and urban economies. They offer numerous services, including:

• Digital wallets
• Online payments
• Microloans

Their sole aim is to enable rural communities to participate in the formal financial system. As a result, more and more rural residents can access banking services through mobile apps and internet-based solutions. They can easily open saving accounts and conduct digital transactions effortlessly.

Offers Customized Solutions

Rural communities may have irregular income patterns. So, to cope with the same, fintech companies offer customized services that align with their income patterns.

For instance, fintech companies are microlending with flexible repayment terms that best suit the income pattern of the borrower.

Lower Transaction Costs

While traditional banking services were expensive because of the associated operational and infrastructural costs, fintech companies have reduced the transaction costs significantly to make financial services more lucrative and affordable for rural communities.

Agricultural And Agri-Tech Solutions

India’s agricultural sector relies heavily on its rural population. Several fintech companies have recognized this. So, they have come up with specialized agri-tech solutions tailor-made for farmers.

These agriculture and agri-tech solutions offer different services, such as:

• Crop insurance
• Weather forecasting
• Market information
• Access to commodity markets

These solutions have:

• reduced risks for farmers
• increased productivity
• contributed to the well-being of rural farmers
• ensured better yield for them
• sustainable livelihoods for farmers

Government Initiatives

The Indian government has left no stone untouched to promote financial inclusion in rural areas. They have launched several schemes and initiatives, all aiming at integrating rural communities with the formal financial system. Contributing to their efforts, fintech companies have played a significant role by offering accessible and inclusive financial services to rural Indians.

Endnote

Undoubtedly, the role of innovative financial institutions in rural India can’t be overstated. They have positively impacted the way financial services are accessed and utilized in rural India.

Soon enough, fintech companies will expand their reach in rural India to bridge the gap between urban and rural economies to create a prosperous and inclusive nation for all.

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