The Challenge: Many regions of rural India have seen sporadic development over the years, where financial inclusion remains one of the prime challenges. It is a powerful weapon to lift the rural poor and bring the fruits of economic development to them.
In 2017 the Telangana State Cooperative Apex Bank (TSCAB), embarked on an ambitious financial inclusion project to bring the state’s rural population under the fold of banking. The bank integrates the entire customer base of a 3-tier cooperative credit structure, including District Cooperative Central Banks (DCCBs) and Primary Agriculture Cooperative Societies (PACS).
I witnessed the helplessness and ignorance of the rural masses first-hand during the project. The massive financial inclusion project encompassed the entire rural population in Telangana state. When we decided to take up the mammoth task, we knew it would be an uphill walk but our determination and the smiles of the rural folks inspired us.
The whole team of TSCAB came together. The project hinged on multiple factors— 24/7 internet connectivity and electrification, large-scale ERP implementation, deployment of robust digital applications, and huge resource mobilization.
Apart from these, the biggest challenge was the very low literacy rate of the rural population, comprising poor and marginal farmers in the remote villages.
We realized early on that only a multi-stakeholder approach to tackling the problem would lead us towards success. The bank formed many committees to spearhead each issue—people, technology, process. With the support of the state government, we held multiple stakeholder discussions at the ground level.
Our discussions also aided the bank to understand that a non-traditional style of addressing the problems should be adopted. One committee liaised with the cellular mobile network operators to seek the required bandwidth for the digital applications to work effectively. Another looked at innovative ways to overcome electricity supply issues for the ATM with solar power. The third is for planning the operation of mobile ATMs (ATM on wheels) to cover the length and breadth of villages. Fourth, to mobilize villagers and educate them about the benefits of financial inclusion and the operation of digital applications.
We were successfully able to complete data digitization using solar energy to overcome electricity supply problems to power our ERP systems. For internet connectivity, a special VPN (Virtual Private Network) device was set up at various locations.
It is really heartening to see the impact that hundreds of TSCAB, District Cooperative Central Banks (DCCB), and Primary Agriculture Cooperative Societies (PACS) employees together with concerted efforts from the state government have been able to achieve. The outcome of the initiative can be witnessed by the mind-boggling statistics— nearly 32.5 lakhs villagers in Telangana have joined the digitalization revolution. The daily operations are carried out by 4,500 people across various offices.
What makes this special is the unity and a sense of mission which prevailed during the course of the project. The smiles on the faces of the villagers, when the representatives collected money door-to-door and gave them their digital collection receipts, lingers on. The villagers now feel empowered and out of the clutches of bad money-lending practices.
The bank has seen 300% growth in the total business on account of the initiative. In the last 3 years, TSCAB has introduced payment channels such as Mobile Banking, IMPS (immediate Payment Service), AEPS (Aadhaar Enabled Payment System), ATMs, Micro ATMs, POS terminals, installing 250 ATMs, 1500 Micro ATMs, 10 Mobile ATMs, 1500 M-POS terminals availing approximately 2000 payment digital transaction channel touchpoints across interior rural areas of Telangana including no other bank having a branch or ATM.
This initiative has made TSCAB a reference example defining the service expansion horizon of Cooperative banks and being academically studied by other SCBs.