Vritti January 2020 | Page 18

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.