Harvesting financial inclusion with AI
AI is casting ripples in the areas of agriculture, rural development, and financial includes, and can consequently impact the lives of people in rural India.
Shyam is a farmer in Payvihir, a small village in Maharashtra. He is known for his sitaphal crops. He realises that the demand for his crop is high; he can earn a lot more if he can meet said demand. The land he needs to acquire in order to almost triple his supply is expensive. Shyam does not have enough standing to borrow from lenders in the village and is afraid of banking procedures. Large sections of rural India remain underbanked, with only 20% of ATMs available to the people. According to a report, only 27% of the rural population is financially literate.
Shyam is at a crossroads. What can Shyam do?
Let’s reel it back a little. Why are we discussing Shyam’s story? Why do we care about what Shyam does?
Because, as with most other industries, AI is casting ripples in the areas of agriculture, rural development, and financial includes, and can consequently impact the lives of people like Shyam.
On one hand, AI has the potential to make monumental shifts in the agricultural landscape by enhancing productivity, minimising rots, planning crop rotation, creating credit lines, etc. On the other, it is transforming the fintech space and how we approach financial inclusion.
If managed well, the rural population can become a major contributor to the growth of the Indian economy.
So it is important that we understand how to better equip folks like Shyam with whatever they need to get their hands on the kind of AI-powered products that will help them improve how they work.
AI’s role in rural fintech
AI is set to transform fintech in rural India, tackling the unique challenges of access and literacy head-on.
Just imagine Shyam using an AI-powered platform that simplifies loan applications and offers tailored financial advice, or an AI-powered platform that can help with input on agriculture.
Several startups, such as Digitap.AI are already making strides in this direction, using AI and machine learning to onboard customers digitally and assess creditworthiness through various data sources.
Scienaptic is another startup that enhances operational efficiency through AI by automating manual processes and providing predictive analytics. This enables financial institutions to deliver faster and more efficient services, which is crucial in rural settings where accessibility is a major issue.
AI, of course, has the power to make financial services more inclusive by simplifying and personalising experiences. Another interesting and important facet that AI can help with is building trust. AI-powered platforms can offer 24/7 customer support, and can help foster a faithful community of rural users.
Today, this element of trust is taken care of by nanoprenuers – owners of micro-scale businesses who run varied grassroots businesses such as general stores, micro wholesale or function as street vendors. These nanoprenuers have become a medium for fintechs and banking institutions to reach out to the rural population.
As AI continues to evolve, it’s clear that its role in fintech is not just about enhancing efficiency but about creating opportunities for millions in rural India.
With 87% fintech penetration in India and growing internet infrastructure, India is on the cusp of balancing the financial inclusion crisis between its urban and rural counterparts.
Fintech startups are the major drivers for this solution, and can achieve monumental breakthroughs. The Government of India also plans to foster financial literacy and inclusion through AEPS, USSD (which enables mobile banking without internet) and agency banking. There is also a push for Digital Banking Units (DBUs) in rural India.
Given this, our friend Shyam stands a chance to borrow money and grow his farming business. Perhaps someday, you will see Shyam’s face printed on a box of sitaphals, symbolising the transformative power of fintech in rural India.
