Despite having the highest adoption rate of 87%, India’s rural and semi-urban regions remain significantly underpenetrated by financial services. This underpenetration stems from a lack of familiarity with digital technology and financial inclusion among these populations.
Limited infrastructure, patchy internet connectivity, and a scarcity of physical branches make it challenging for people to access services digitally or necessitate long-distance travel. Establishing and maintaining branches in remote areas requires substantial investment from financial service providers.
There is also a notable disparity in technology adoption in such regions. Many residents lack access to smartphones, computers, or the internet. Even in cases where technology is accessible, there may be a lack of familiarity or ease in using digital financial services, adding complexity to efforts to provide financial services.
Assisted digital banking can make fintech services accessible to underserved populations. By leveraging data, analytics, and innovative business models, such as Distribution as a Service, gaps can be filled and societal needs can be met.
Trust is crucial among rural communities who mistrust digital solutions. They typically prefer personal interactions for financial transactions. PayNearby capitalizes on this trust by transforming retailers into an extended arm of the banking system, delivering essential financial and digital services to the last-mile community.
Its Distribution-as-a-Service (DaaS) network, comprising over 12 lakh active retailers, plays a vital role in this effort by providing a familiar touchpoint for customers. PayNearby focuses on upskilling its workforce to align with its diversified offerings, ensuring expertise in digital, financial, and customer satisfaction domains.
The surge in Unified Payments Interface (UPI) transactions, soaring by 118% in rural and semi-urban retail outlets in 2023, marks a notable trend shift. The increase in transaction value by 106% indicates growing acceptance of fintech services beyond banking, encompassing utility payments, insurance, credit, and assisted commerce.
This growth underscores the significance of fintech companies expanding their reach to include the 65% of Indians living in rural areas.
