18
vritti
January 2020
Create Tailored Services
for the Rural Segment
‘One size fit all’ services might not work for
rural customers. Mobile money providers need
to understand how rural customers earn, transact,
save and borrow to create tailored product
suited to their financial needs. For example,
owing to the lack of an affordable formal
financial infrastructure, community-based
cash-centric financial organizations such as
savings clubs, Village Savings and Loans
Association (VSLAs), SACCOs and burial
societies are popular in rural areas. Mobile
money providers are digitizing these cash-
based organizations and connecting them to
mobile money. This is aimed at bringing the
benefits of digital payments to these conventional
financial systems such as security, transparency
and interest generation.
Mobile money providers are experimenting
with multiple need-based services for the
rural population, such as, crop insurance for
small-holder farmers, digitizing payments in
supply chain for small agro-business, insurance
for pregnant women to reduce maternal
mortality, paying transportation fee for patients
and enabling them to travel easily, digitizing
birth registration and related payments in
remote areas, loans for rural SMEs, et all.
These services might cater to a niche segment,
but will go long way in increasing mobile
money adoption and usage in rural areas.
Mobilution
Leverage the ‘Location’
to Craft a Differential
Pricing Strategy for
Rural Areas
Disposable income in rural areas tends to be
lower than urban areas. Hence, rural
customers are generally more price sensitive,
which mobile money providers need to
consider while designing a pricing strategy.
‘Location’ can be an important tool in pricing.
To encourage mobile money adoption in rural
areas, service providers can set lower service
charges on cash-out and bill payments in rural
areas, compared to urban areas. Similarly, the
service charge levied by merchants, whilst
executing a transaction in rural areas should
be less than in urban areas. In case of mobile
savings accounts, higher interest should be
given to rural customers. Governments and
regulators should also think about setting
lower taxes on mobile money transactions in
rural areas.