Interviews

Banking and Fintech Startup Mahagram on a path to digitize Rural India

Mahagram aims at potentially enabling every Indian to seamlessly benefit from financial inclusion, Government programs, and wider access to basic goods and services. They leverage their vast network of retail access points to deliver real-time BFSI services, Government-to-Citizen Services, and Business-to-Consumer Services to the unserved rural, semi-urban, and urban markets. They aim to be the most trusted consumer service point for rural India, by making solutions even more simple & sustainable and by offering products & services that are even more reliable & affordable. Mr. Ram Shriram, CEO, Mahagram in discussion with CXOToday shares his insights on the same.

 

Q1. What is the principal concept behind launching Mahagram? Could you please tell me the business model of Mahagram? How does Mahagram benefit people in rural areas?

Ans. Mahagram is a well-recognized technology-driven FinTech company. It focuses on creating India’s largest network of last-mile retail points of sale.

Mahagram over the years has carved a niche for itself in the market and is known as a tech-driven company focusing on innovative banking & financial technologies to help digitalize villages. By partnering with banks and financial institutions Mahagram is providing solutions to resolve basic banking services and government schemes through their 7 lakh plus established chain of retail outlets. The idea is to help poor and needy people with financial, government and banking services through neighborhood shops owned and managed by the residents.

The platform helps government, banks, and local government bodies with implementing their citizen-centric projects in rural India. It offers Aadhar-enabled payment services that work as an ATM used for cash withdrawal at places where there are no banks within accessible limits. Also, at Mahagram they have domestic money transfer options that help the laborers from out of the state to send money to their families on an immediate basis.

Mahagram is currently servicing nearly 15000 PIN codes and providing basic banking, E-Governance & other BFSI services through the distribution network of around 12000 distributors & 7 lakh + retail partners. The company has expanded across 17 states with a strong foothold in Western, North, and Northeast states. The Mahagram team’s mission is to create the largest distribution network of 4 lakh RBC outlets that access over 30 million rural and urban poor by providing world-class technology and reaching the last mile customer.

BharatATM by Mahagram is a financial platform that helps kiranas and neighborhood retail stores offer banking services to customers. Under the brand BharatATM, we have endeavored to drive universal inclusion through the brand’s ‘BankSakhi’ initiative, which aims to ‘financially empower women. The initiative has borne a great head start and helped 11,230 women earn an average of Rs 8K/month. We are in the process of amplifying our means to reasch out to more and more beneficiaries of the initiative in driving a social change that spells ‘women empowerment in its truest form.

  • BharatATM has created employment for more than 2 lakh rural citizens
  • We have onboarded more than 11,000 women as Bank Sakhis and empowered them with decently paying professions.
  • Created financial awareness in more than 1 million rural consumers
  • Helped more than 2 million customers provide cash on demand during the pandemic

 

Q2. How did you develop the technology?

Ans. When I along with Mahagram’s team identified a problem and a logical solution and the next step was converting the solution into a technologically advanced, most modern, and user-friendly, interactive technology to empower both our network as well as service delivery. Of course, needless to say, there were so many tech platforms available for us to develop our application. But after deep study and thorough tech research, we finally identified a NET platform with core java in order to develop a technologically superior 4-tier security layer-driven fintech application, we are proud of the fact today our application is considered the best-benchmarked application in the fintech space.

 

Q3. Financial inclusion of women especially in rural setups has been a national agenda; what are initiatives taken up by Mahagram in translating the agenda?

Ans. As FinTechs are playing a major role in scripting India’s growth story, and bringing the needed financial inclusion across the country, they are also playing an important role in empowering women. To empower the women of the rural areas, the fintech micro-ATM organizations like Mahagram are collaborating with different women-centric programs like ‘Bank Sakhi.’ The rural women are trained by the Fintech institutions and serve as micro-ATMs to ease the lives of the rural people during the pandemic era.

Mahagram has signed a partnership with the IndusInd Bank, a new-generation Indian bank to digitize the country’s payment ecosystem and provide a wider horizon to transact especially for its customers in rural India.  The partnership between the two aims to boost financial inclusion, encourage socio-economic development, mitigate the risks of a shadow economy, and accelerate the growth of a cashless society.  This association will also ensure the building of an efficient, reliable, and secure payment ecosystem, which will not only promote and encourage the use of e-payments methods but will also help merchants across the country to accept digital payments easily, making it more accessible for everyone. Mahagram’s target will be to add 15 million small merchants to the UPI QR in this fiscal year. Going forward, our vision is to expand into other sectors, as we work to advance the full payment ecosystem and achieve financial inclusion in India.

Mahagram recently tied up with the Bank of Maharashtra to roll out the ‘Bank Sakhi’ project in the state of Odisha to provide financial technology and infrastructure support to the project. As part of the tie-up, the company has onboarded more than 11,230 bank sakhis (women) on the BharatATM platform to help the rural citizens avail basic banking services at their doorstep or the next-door Kirana stores, thereby driving rural financial inclusion.

Under these schemes, women from the Sakhi Mandals are being trained as Bank Sakhis, Bank & Micro-ATM correspondent agents. These women deliver banking services like cash deposit and withdrawal, money transfers, loans, etc. at the doorstep. These women are trained to take banking services to remote areas of the state. With help from micro-ATMs, these women are increasing financial inclusion and delivering government schemes while earning a living. While the Bank Sakhi model is an innovative strategy to achieve financial inclusion, it was women banking agents who were poised to deepen the last-mile delivery of financial services, especially for women customers, in hard-to-reach rural areas.

 

Q4. How do you generate revenue?

Ans. Each and every transaction agent performing on the eGram Kendra platform is linked with some incentive paid by the Government or banks. The maximum revenue comes from the transaction fees we charge to the issuing bank (customer’s bank) or to customers as convenience fees. RBI & NPCI has set some standard transaction interchange fees in AEPS (an interoperable aadhaar-based transaction model) which is 0.50% and a maximum of Rs.15 which has to be paid by Issuer bank to acquire bank further shared or paid to Mahagram and retailer.

 

Q5. Which are the States you have covered?

Ans. Mahagram is present in more than 17 states of India. Majorly covered Maharashtra, UP, Bihar, Jharkhand, West Bengal, Punjab, and other northeast states.

 

Q6. What is the growth path for Mahagram?

Ans. Our purpose is to establish Mahagram as a brand synonymous with being India’s largest network of last-mile retail points of sale for basic banking needs. The Mahagram team’s mission is to create the largest distribution network of 4 lakh RBC outlets accessing over 30 million rural and urban poor by providing world-class technology, reaching the last mile customer.

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