Indeed, India voyaged a long way in its digital transformation journey, and one great example is the access to fintech by people residing in rural regions. More than 30 lakh rural banking outlets are supporting the needs of rural areas, and the government has taken exceptional initiatives.
Based on the same, it won’t be wrong to say that 2023 and the upcoming years will be a gamechanger for rural fintech ecosystems.
Now that the fintech revolution is taking place in the form of cashless payments, open banking, and technologies like crypto and Web3, entrepreneurs have realized the rising opportunities and are working toward their objectives.
So, how are fintech companies working towards the goal of making rural India tech and digital savvy? This article will highlight the same. So, begin reading!
Fintech Challenges Faced by Rural India
Notably, more than 65% of India’s population resides in rural areas. Though digital India has seen exceptional growth, the urban-rural gap still needs to be bridged to overcome the fintech setbacks.
Listed below are a few fintech challenges highly faced by rural India:
1. Absence of Banking Infra
As per the World bank, millions of Indians don’t have a bank account, which is one of the primary reasons behind no access to financial perks like ATMs, credit, insurance, and more. Don’t you think it is a huge barrier for fintech companies to provide the right services to rural India?
2. Less Income
Lower-income groups face delicacy while acquiring financial services, since there’s the absence of investment returns, along with higher costs. Additionally, due to the lack of fintech institutions in rural areas, improvement in financial services is considered a prerequisite to ensure safer transactions.
3. Little or No Digital Literacy
Evidently, there’s a gap in urban-rural digital literacy, another matter of concern for fintech companies. Notably, it will be much more difficult to convince the people of rural areas to build their trust in modern technologies, which is a must for growth.
4. Access and Adoption of Tech
Only 30-35% of people living in rural areas have access to smartphones and the internet. Therefore, a lack of comfort with new tech is evident, which becomes another major reason behind the difficulty of venturing into the rural market.
Solutions That’ll Accelerate FinTech in Rural India
Take a look!
1. Digital Banking
A significant chunk of the Indian population does not even have access to traditional methods of banking due to lengthy processes, the absence of infrastructure, and other reasons. Fortunately, digital banking holds the potential to eliminate all these issues with the help of a smartphone and an internet connection. Moreover, banking has become hassle-free with digital solutions that provide a paperless approach and online KYC.
2. Digital Insurance
Insurance is essential to fight the uncertainty of life; however, only 8-10% of people in rural areas sign up for life insurance. Indeed, the insurance market is untapped in these areas, which provides fintech companies with a vast opportunity to innovate and provide insurance to people in every part of India via digital means.
Health and life insurance companies are now emphasizing fintech app development to meet the same with the help of the best mobile app development company.
3. Digital Lending
People in rural areas tend to seek microfinance to fulfill their financial needs. However, sometimes it becomes difficult for these microfinance providers to offer loans due to the absence of credit history or monitor credit worthiness.
Again, digital lending in this case provides a massive growth scope and ensures ease of lending for rural India.
4. Introduction to Innovative Products
As said earlier, the fintech industry has come a long way and is now witnessing the launch of innovation like never before. Products like digital credit cards, buy now pay later (BNPL), digital asset management, and more holds immense potential to enhance fintech functioning.
In a Nutshell
In a country like India, where the population is vast, it may become difficult for traditional banking mechanisms to reach each and every person. Therefore, fintech is a boosted and fast-emerging solution for urban and rural areas to meet their financial needs via digital means.
Indeed, the change is already visible as UPI has become one of the most used fintech services; however, it’s still a long journey.
Do you want to contribute to bridging the fintech gap for rural areas? All you need to do is build a fintech app that fulfills the requirements of people. And how would you do so?
Partnering with a fintech app development company is your way to go!
So, what are you waiting for?
Begin your journey to innovate!