“Fintech’s play in the rural economy is driven around Aadhaar for transactions where the biggest digitization has happened during Covid,” says Sasidhar N. Thumuluri, CEO and MD of Sub-K, a rural-play Fintech. The value lost in regular transactions has been made up for through the jump in the number of people using digital platforms, he adds.
Early adopters of digital banking are emerging in rural areas and there is an increased willingness among microfinance customers to stay digital, according to Thumuluri. “The journey has started and the customers will quickly catch up,” he says. Sub-K expects 25-35 per cent of its MFI collections to happen in the digital format in the next couple of years.
The digital push is not the only sign of a shift towards the rural economy. For Mukherjea, the recovery being seen in auto and consumer durables shows a fundamental shift in credit disbursals towards smaller towns and villages. “This could sustain over two to three years and that will give the recovery a specific shape and pattern which could make it far more sustainable than perhaps many of us are fearing at this juncture,” he said.
The Economic Times features insight from the CEO of Accion portfolio partner, Sub-K.