Item% of Total Population70 Income56 Expenditure64 Teledensity17 Savings33 Consumer goods30-60 Top 20% Rural Households Profile% Land-owning farmers39 Salary/ wage earners31 Self-employed in non- agricultural activities. 18 198020072012 664033 Rural Profile Item% Rural Households No Land40 Marginal (< 2 h)30 Medium (<10 h)25 Large5 Farm Income
Relative Size of Rural Markets There are almost twice as many 'lower middle income' households in rural areas as in the urban areas. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. Middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.
Changing fast Large, Comparison with urban Not homogenous mass (Customized services) Services and products may not be directly be adopted from urban markets For many rural consumers, first experience of service may not be through physical infrastructure (banks, health, education) Emerging Profile Rural Markets
Extent of Financial Exclusion Source: bda: Overview of Mobile Banking and Convergence, FICCI Communications & Digital Economy Committee, September 2008. Predominantly cash economy, a large informal sector, with many people employed casually. An important proportion of overall economic activity.
Enhancing Services: Policy and Regulation Business Correspondent model No Frills Account Financial Inclusion mandates and Fund (support IT) NREGS
Rural Banking Focus on opening no Frill Accounts (especially since banking correspondent model in January 2006) From 0.5 million in March 2005, at least 33 million by March 2009, (many accounts non-functional). Only 11% of 25.1 million such basic banking accounts, opened between April 2007 and May 2009, are operational. Rural bank branches only 5.2% of the countrys 650,000 villages. Access to credit: very limited
mKRISHI – Mobile Agriculture Provide personalized advice to the farmers on fertilizers / pesticide based on the current parameters like location, crop image, prevailing environment condition in the native language.. Benefits Accurate Advice based on facts and prevailing conditions. Empowerment of farmers with current market information. mKrishi knowledge base can be utilized by universities and expert to understand crop, micro and macro pattern in the Indian context.
Motivation - Bridging the Gap CDMA Network Government Servers Weather Servers Bank Servers National Commodities Exchange Expert Advice from Agriculture Universities & Research Institutes Local Markets Soil Sensors Internet Village Knowledge Center
Process Description 1. Sensors Collect Soil Data Data Consolidation Unit Data Consolidation Unit 2. Consolidate 3. Parse information & retrieve accurate advice 4. Prepare and Send SMS in Local Language Agriculture expert database 5. SMS to Farmer in Local Vernacular
Challenges of Rural Telecom Service Integrating the physical supply chain with the electronic Converting the supply chain to electronic Last mile: Selection of village level institutions and individuals Veracity of information, dealing with complexity of linkages Supporting Innovation in start ups
Challenges of Rural Telecom Services How to link the customers to the services Technology as the enabler. But is that enough? Development of an ecosystem Technological innovations (speech recognition, low cost ATMs, tele health devices) Entrepreneurship: Linking the solutions to target village consumer groups (Seed and angel funding, institutional support) Private enterprises (village level entrepreneur), creating several services on a single platform: Mobile: PC (CSC) Integrating services and payments Scaling Up
Innovation Ecosystem (Incubators, Seed and Angel Funding) Rural Citizen Business/Informatio n Ecosystem (what services, cost, intermediaries) R&D (Technical and Market) (Speech recognition, NFC) Critical Elements: The Two Ecosystems
Regulatory Issues Publicly funded research USOF support Facilitating services (banking, proportionate regulation, NREGS) Framework for regulation (Interoperability, security )