MARKETING OF BANKING SERVICES IN RURAL AREAS

MARKETING OF BANKING SERVICES IN RURAL AREAS By SHIVRAJ SINGH NEGI MARKETING OF BANKING SERVICES IN RURAL AREAS

WHY ? WHO? NUMBER? MARKETING OF BANKING SERVICES IN RURAL AREAS

MARKETING OF BANKING SERVICES IN RURAL AREAS “ The Indian rural market with its vast size and demand base offers a huge opportunity that MNC’s cannot afford to ignore” The Hindu Business Line, 9th May 2008

17.7% in the lowest income quartile have a bank

Account.

Less than 10% have any insurance.

50% of loans taken by the lowest income quartile have annual interest rates > 36%.

Micro-enterprises with investments below USD 10,000 get 2% of net bank credit.

One bank branch per 18,000 population (rural).

MARKETING OF BANKING SERVICES IN RURAL AREAS PRODUCT PRICING PLACEMENT (or DISTRIBUTION) PROMOTION Multiple ‘basic’ financial services. Devised to ensure usage as well as profitability. Conveniently located. No discrimination . Human groups and Institutions of the area . Insurance (Cattle, Farm Produce etc) . Maximizing consumer satisfaction. Comprehensive offering of different services. Demographics, culture, environment. Services in native language. Single uniform pricing. Choice between managerial models. Psychological methods . Microfinance. Quantity discounts, and ease in payment modes. Additional risks for narrow diversified entities. Collaborating with NGO’s to develop knowledge. Financial advisory services Agenting model (service points) Loan Gateway Biometric ID’s

RBI CAB, Pune report on marketing of banking services in rural areas, published in March 2007.

"Empowering the Rural Household" presentation by Dr. Nachiket More for the Pan IIT 2008 panel discussion on "Leveraging Research and Technology for Rural Development“.

“ Inclusive Financial Systems: Some Design Principles and a Case Study” article by Nachiket More and Bindu Ananth, published in Economic and Political Weekly March 31, 2007, pages 1121 to 1126.