How ‘Distribution As A Service’ Startups Are Bridging The Rural-Urban Divide

In India, the top of the pyramid is in good stead economically and benefits from credit, investment and other financial products. However, the scenario changes as we go outside this top cluster and beyond the Tier I and II cities and metros. 

Even though India is a massive market, a large portion of it remains untapped and lacks access to essential financial services. According to a World Bank report, India is one of seven countries where the world’s 1.4 Bn adults lack access to formal banking. 

Fintechs are rapidly becoming the face of financial empowerment globally, particularly in economically diverse and emerging countries like ours. Technological innovations aimed at bridging the urban-rural divide can bring more tech-averse people into the realm of financial and digital inclusion. 

The idea is to push the service providers on a journey where they can make a difference – outside an easily accessible market of the tech-savvy urban customer base. 

To generate appeal among the rural stratum, service providers need to track adoption patterns closely and understand customer needs and aspirations to make India more inclusive. Digitisation, sachetisation and universalisation of products and services are the ways to capture the last mile. Customising affordable offerings to meet their future goals allows communities lying outside the financial and digital fold to consume the services securely. 

Furthermore, financial and digital products aimed at the last mile must have a small ticket size, be layered with trust, and aim to meet the needs of a specific population. Fintechs are now serving a significant segment of the population through customised low-value, high-volume transactions, thanks to simple and affordable plug-and-play solutions. 

Now, with sachetisation in place, how do financial and digital service providers solve the challenge of reach and go about distributing it to the right audiences? 

This is where Distribution-as-a-Service (DaaS) comes in.  

Understanding DaaS

DaaS aims to simplify high-end technology for consumption at the last mile, democratising services and making the advantages of the modern world available to the masses. 

The DaaS framework ensures that service providers can make their services available to previously unserved regions of the country through local retailers at the last mile. Today, DaaS is a sure-shot way to transform the sales potential of a product into actual sales. 

Poor infrastructure and fragile distribution channels often frustrate companies’ efforts to seize the growth opportunities arising in rural India. However, with DaaS, companies can overcome these challenges and reach the right audience with the right products. 

The DaaS model, which uses APIs and a plug-and-play technology framework, enables enterprises to make their services available to the country via a vast network. The simplified technology that serves as the DaaS platform’s backbone enables fast, dependable, and scalable solutions for service providers on one end and easy and stable consumption at local stores on the other. 

It also ensures a quick, error-free, and dependable go-to-market, and is one of the key success parameters for any distribution-led strategy. DaaS has made it possible to simply walk into a local kirana shop and purchase an OTT recharge or insurance along with 1 kg potatoes or 1 kg pulses.

Given that the next wave of growth in the country’s economy is likely to come from rural consumption, DaaS is bridging the gap between conglomerates and rural consumers and assisting partners in accessing the last-mile market. 

It ensures that the country’s interiors no longer miss out on the benefits of modern advancements, while also providing a consistent stream of revenue for local micro-entrepreneurs and service provider partners. The tech-backed service enables large enterprises to reach previously inaccessible rural heartlands in the shortest possible time, while also making tech-averse citizens more financially aware, one transaction at a time.

Bridging Urban-Rural Divide

In today’s fast-paced evolving world, business-as-usual will not resolve the pressing challenges faced in the distribution of financial and digital services. This requires the financial services ecosystem to build new capabilities. 

As new participants enter the distribution network, the role of all players in helping customers make informed choices will be paramount. Aptness, trust, objectivity, and competence in providing financial assistance to customers will be essential for capability building in the distribution of financial services at the last mile. 

Going ahead, DaaS has the potential to bridge the urban-rural divide and ensure that rural India has access to all the financial products and services as its urban counterparts. By bridging this gap, DaaS is building the route to India’s financial inclusion.