A small startup, a frugal mindset and a disruptive technology are shaking up the rural banking scene in India, giving 300 million dwellers a chance to get a bank account.
India's rural economy has been growing with disposable incomes rising, especially in rural areas where spending power accounts for 57 percent of the $780 billion spent annually compared to 43 percent in urban areas.
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However, 60 percent of India's rural population, compared with 40 percent overall, does not have a bank account. In spite of a robust banking infrastructure and a government aim to include the rural economy into the mainstream, only 5 percent of 600,000 villages have a commercial bank branch and just 2 percent of people living in rural India have a credit card.
The simplest and most cost-effective way to reach out to this huge untapped market is through ATMs. At present there are only 150,000 ATMs deployed in the country and are expected to reach 400,000 by 2017. But the cost of setting up bank branches or ATMs is still too high and there are still a lot of red tape and conservative attitudes in the banking business itself.