- By Anupama Joshi, CEO, Sahastradhara KGFS and Advait Behara, IFMR Rural Finance

In an earlier post on this blog, we mentioned that ‘Mobility’ was going to play an important role in enabling access to KGFS’ products and services in remote rural locations.

In the district of Tehri Garhwal in Uttarakhand where Sahastradhara KGFS operates, physical access to KGFS branches is made challenging by an inhospitable terrain. With much of the district located at and between the foothills of the Himalayas, access by road is limited. For many villages access is restricted to un-motorable roads which are often sealed by landslides caused by torrential downpours – a frequent occurrence during the monsoons. The monsoons are particularly fierce in these hills and continue from June until late September. Winter doesn’t make things easier. Snow in the more northern areas often brings life to a standstill – Villages are cutoff from power, communications and access to basic supplies.

It’s no doubt then that Sahastradhara makes an ideal case for mobility solutions that tackle many of these access restrictions.

Where would we start?

Enrolling a significant number of potential customers is a fundamental step in delivering services. Enrolments are necessary in building the critical mass of customers that is needed to effect change and create real access to the benefits that KGFS could bring to an area.

Most Sahastradhara branches cover a service area with a population of around 7000 inhabitants. Branches are typically centrally located near a market place making them accessible when people visit the market.

Since its start, at every place that Sahastradhara opened a branch, local store owners were quick to realize its benefits. Store owners were often the first customers of the branch. Thereafter frequent visitors to the market would approach KGFS to inquire about its services and would usually signup as well. This process would continue for a few months until a certain level of enrolment equilibrium had been reached at that branch.

After a few months activity would slow down. New customers would become scattered. New enrolments would no longer be proactive. New enrollees would visit KGFS to address a specific need – a sudden loan requirement – rather than as a planned financial initiative. Also many of these had family members that were already KGFS customers – and had already experienced the benefits that Sahastrasdhara KGFS had to offer. Unfortunately new (financially excluded) families were still keeping away. Sahastradhara recognized this. There was a need to “reach-out” to more people. Enrolling more people into the Sahastradhara network was one way of spreading the message and creating awareness.

The Challenge of Enrolment

The enrolment process at the branch was straight forward. Unlike signing up for common utility or government services, it was easy (customers only needed proof of their identification and home address) and it was free.

KGFS had incorporated a comprehensive customer registration system. This was done to create a unique customer profile that would allow easy access to all services that KGFS had to offer. In addition to basic demographic information, the system was capable of capturing details about the family, its lifestyle, its assets and liabilities and importantly digital copies of the customer’s photo, fingerprints, and even scanned images of identification documents. A high degree of branch automation using computers, technology peripherals and internet connectivity made all this possible.

And therein lay the challenge.

How was branch automation going to be made portable enough to allow Sahastradhara to ‘reach out’ further?

Early trials with laptops that replicated the branch setup were encouraging. The premise was that field staff would be able to take the branch setup (in a portable form using laptops) to the customer’s doorstep.

While theoretically feasible, in practice this setup did create an interesting set of challenges:

1. Portability/Weight: A Laptop computer + a flat bed scanner + an optical fingerprint reader + camera + necessary charging and connectivity cables suddenly meant that field staff needed to carry a few kilos in a backpack while climbing up and down steep inclines to get to villages in their territories. Reports from the field suggested this was difficult particularly during harsher weather.
2. Power: Even with extended capability batteries – peripherals that drew current from the laptop ensured a typical battery life of only 3-4 hours. With access to power still a challenge in some villages frequent trips back to the branch were necessary.
3. Cost: The multiple peripherals required meant more fixed costs per branch – sometimes in excess of 10% of existing fixed branch costs.
4. Human Angle: While technology in the form of television, satellite tv, and telephone was common place in these areas – computers and the peripherals necessary for enrolment were still alien. Field staff would often face puzzled looks and hesitation as they went about setting up the equipment before starting an enrolment. Customers were uncomfortable with the elaborate technology layout for what they felt should have been no more strenuous than a paper based survey – the type other agencies in the area often used. Allaying people’s reservations and fears was necessary.

All these challenges pointed toward a need for mobility that was ultraportable, efficient, and easy to use.

Enter the Mobile Phone

Mobile phones seemed like a reasonable alternative. They were ultraportable, easy to use, easily available, affordable, rugged and a familiar technology in rural India. But were they a possible replacement for the laptop system?

To replicate the laptop system (and the branch) the mobile phone would need to be an all-in-one data entry/capture device; it would need to be the camera it replaced; also the flat-bed scanner, and the biometric authentication device.

Could this be done?

To make the system viable, hardware costs needed to be kept to a minimum. But fingerprint biometrics built-in to phones were rare and did not always meet regulatory requirements. Thus the fingerprint scanner had to be an external device capable of interfacing with the phone. This was an added cost. The cost of the phone therefore needed to be minimal – necessitating a very simple phone with a basic feature set.

The Beginning of the End Result

Sahastradhara KGFS has recently successfully run a proof-of-concept field pilot for mobile phone powered enrolments that addresses a number of these feasibility questions.

Using a basic camera enabled mobile phone with special software, field staff were able to capture photographs of new customers. The images were clear and distinguishable with a resolution comparable with the branch based system. Know your customer (KYC) document images were also captured using the same camera.

A wireless and portable finger print scanner was used to capture customer finger prints and automatically transfer them to the phone’s memory. Customer demographic and other details were (for the time being) captured using a standard paper based customer registration form – in the future this too could be entirely phone based making the paper form obsolete.

At the branch new customer data was entered into the system manually, and the corresponding images and finger prints were uploaded to a remote server through the local computer and internet connection.

Going forward

Still at an early stage in its development cycle the system has already been well received by field staff. At the pilot branch where the system was tested, month on month enrolments nearly doubled. If these numbers are indicative, the system shows great promise going forward.

This is a first, yet important, step as we make mobility an important element in our mission to provide financial access in even the remotest of places.

- By Anupama Joshi, CEO, Sahastradhara KGFS and Advait Behara, IFMR Rural Finance

Well regarded academicians have highlighted the importance of financial services in bringing about a transformation in the lives of those that haven’t traditionally had access to those services. The IFMR Trust was an early leader in understanding this need.

In a relatively short span of time, in the three geographies where the Kshetriya Gramin Financial Services (KGFS) initiative has been active, we have already seen a significant difference in the overall well-being of those families that have actively sought to leverage the services of KGFS and those that have not. KGFS was able to provide these families with a sense of financial stability through a portfolio of specially designed products and services and thereby improve their prospects of a brighter and more comfortable future. KGFS excelled in providing its customers products that were competitive and culturally significant to the local territory.

The next important step for KGFS, in affirming its competence in this role, needed to be customer appreciation of its services. Key to making this happen was going to be:

Accessibility, convenience, and usability

To achieve these, there was a need for KGFS to be closer to its customer, and similarly to bring the customer closer to KGFS. This need for flexibility in delivering services is what made the element of MOBILITY as a new entrant into the operating model so imperative.  Mobility was thus a combination of accessibility, convenience and usability delivered using a combination of mobile technologies.

Customer Challenges

Early feedback from the field had indicated two clear challenges facing customers on the ground.

1) In-person Payments
2) Branch Access Restrictions

Several KGFS loan products like the Joint Liability Group (JLG) loan required customers to repay their installments weekly, and in the case of the JLG, the payment had to be in person, with all group members present at repayment. This was a challenge for many customers, some of whom had to forgo daily wages to be present at the branch, often spend on transport to reach the branch and coordinate to ensure that all group members were present at the same time.

The other issue was that, while KGFS branches opened early and shut late – even working all-day on Saturdays; certain customers had expressed their inability to be present within branch timings and had started requesting longer branch hours.

Clearly, distances and immobile infrastructure were hurdles in accessibility, convenience and usability.

Thinner branch front-ends using technology

As KGFS expanded through a growing network of branches, it was reaching ever closer to its customers – typically no more than a 5 kilometer radius away. The distances between customer and branch were being shortened. With a high degree of branch automation using computers and internet access, branches had been optimized to cater to large numbers of customers with minimal operational overheads. Yet, some important questions had to be answered –

Could the branch front-ends be made even thinner and even more nimble?

An important need was that the branch not just be in proximity of, but feel local to every customer it served. This was an interesting challenge. KGFS realized that a network of appointed agents could provide exactly that flexibility.

Could KGFS take its services to the customer’s doorstep?

Roving agents would:
a) Complement the activities of the primary area branch – and often even free up branches from routine activities.
b) Allow the branch to focus on more skilled services such as financial advice in the form of customized wealth management discussions.

For the customer, interactions with the branch needed to be direct when required – such as when discussing wealth management strategies and indirect (through an agent) in less private dealings.

How was this going to be possible?

Technology was no doubt the answer. A combination of devices and access points was going to be necessary. For example:

- Automated cash deposit machines – possibly located at a main market or in a prominent store could do away with agent intervention while handling cash.
- An agent equipped with a portable access device would be free to transact from a fixed location or at the customer’s doorstep.
- Customers with access to a connected device would have the convenience of performing certain operations in the privacy of their home at a time convenient to them.

KGFS had already tested Point of Sale (POS) machines as transaction points at branches. While these had worked fine at the branch:

- Costs were relatively high
- Technology was dated
- Functionality and the ability to add new features were complex and limited.

So what else could be used?

The ubiquitous mobile phone

Mobile phones on the other hand are an impressive alternative. With over 500 million mobile phone connections across India today, even in rural markets most extended families have access to a mobile phone. Importantly people are comfortable using them. The social challenge of people having to accept a new technology does not exist. The technology has been around for a while. It is stable, easily available and connectivity across the country has been getting better and less expensive.

Through special applications the mobile phone can replicate almost all branch functions. KGFS appointed agents that already own mobile phones could be up and running access points within days with minimal additional hardware costs. Using biometric authentication, and encrypted data sessions, applications can be made secure and robust. Newly available security solutions even allow remote erasing of data in the event the phone is misplaced or compromised.

Mobile phones do hold a tremendous opportunity for KGFS to expand its reach. In areas like the remote hills of Tehri Garhwal, where Sahastradhara KGFS operates, the challenges of physical access make the case for mobility very strong. No doubt in areas like Sahastradhara mobility will be the key to accessibility!