Transcript Organizational and Policy Challenges of the Rural Frontier Rekha Jain [email protected] Association of India Mobile Internet Penetration in IndiaSources: GSM.

Organizational and Policy Challenges of
the Rural Frontier
Rekha Jain
[email protected]
Association of India
Mobile Internet Penetration in IndiaSources: GSM
Rural Profile
Item
Population
Income
Top 20% Rural Households
% of Total
70
56
Profile
Land-owning farmers
%
39
Expenditure
64
Teledensity
17
Salary/ wage earners
Self-employed in nonagricultural activities.
31
18
Savings
Consumer goods
33
30-60
Farm Income
1980
2007
2012
66
40
33
Item
% Rural
Households
No Land
40
Marginal (< 2 h)
30
Medium (<10 h)
25
Large
5
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.
Emerging Profile Rural Markets




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)
Examples from Banking and Agri advisory
Examples from Banking and Agri advisory
M Krishi
RML
•Predominantly
Extent of Financial Exclusion cash economy, a
large informal
2.8%
sector, with many
2.3%
0.1%
Cash
people employed
3.7%
casually.
Credit
Card
Net
Banking
Cash Cards
91.0%
Others
Source: bda: Overview of Mobile Banking and Convergence,
FICCI Communications & Digital Economy Committee,
September 2008.
• 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 country’s
650,000 villages.
 Access to credit: very limited
Retrieving Data Stored Already
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
Bank Servers
Weather Servers
Government
Servers
Expert Advice from
Agriculture Universities &
Research Institutes
Internet
Village
Knowledge
Center
CDMA Network
Local
Markets
Soil
Sensors
National Commodities
Exchange
Data
Consolidation
Unit
Process Description
2. Consolidate
1. Sensors Collect Soil
Data
5. SMS to Farmer in Local
Vernacular
3. Parse information &
retrieve accurate advice
4. Prepare and Send SMS
in Local Language
Agriculture
expert
database
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
Critical Elements: The Two Ecosystems
R&D (Technical and Market)
(Speech recognition, NFC)
Business/Informatio
n Ecosystem (what
services, cost,
intermediaries)
Rural
Citizen
Innovation Ecosystem
(Incubators, Seed and Angel Funding)
Regulatory Issues
 Publicly funded research USOF support
 Facilitating services (banking, proportionate regulation,
NREGS)
 Framework for regulation (Interoperability, security )
Thank You