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A road map for strengthening India’s rural economy

24 Aug 2021 by Team FinFIRST
a-road-map-for-strengthening-indias-rural-economy

We can only call a country developed when its urban and rural economy can stand shoulder to shoulder, next to each other.

For instance, if a young person from a village approaches his nearby bank, he should be able to access the same credit facilities such as personal loans, consumer durable loans, and other offerings such as overdraft, locker facilities as someone living in a metro city would.

Most of India’s industries are powered by folks from rural regions who move to urban areas for work once they graduate. This does not mean we neglect the rural regions. Instead, we need to make sure they are economically self-sustaining.

Having said that, here are a few pointers, we believe, can help build a solid road map to strengthen India’s rural economy:

Increase the pin codes financial institutions service


Every person above the age of 18 must have a basic savings account. Unfortunately, this is not possible for many people because their location does not have a bank. This inaccessibility to financial institutions excludes a lot of people from basic banking services and from seeking credit in the form of small business loans to fund their start-ups. 

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To explain better, we have listed a few ways in which digital lending re-energises Indian economy:

Digital banking and lending must lead the way


The issue of banks not servicing enough pin codes in rural areas is widespread. Technology provides a smart solution to this problem. If bank branches can’t reach villages, their apps can because most people in India own a smartphone with internet access. They can use the bank’s app to open a savings account, send and receive money online, order and use a digital credit card, and even apply for loans.

Rural financing must become a priority


Businesses are run on credit. In India’s rural regions, most, if not all, people need a loan to start their venture. Most of the times, it’s a regular sweet mart or a photocopy centre or a general store. If banks can service their needs through personal loans or business loans, it lets them become entrepreneurs and power their region’s economy by meeting demand and generating employment.

Run education programs


A crucial aspect of powering a region’s economy is to make sure its residents are educated on finance and investment. India’s rural regions love cash; it is widely used to conduct transactions. While debit and credit cards are often unheard of and most people only keep their money in their savings account. Government and financial institutions need to run outreach programs to teach them about various investment options and credit facilities so that they can grow their wealth, beat inflation, and go on to run their businesses successfully.

A country’s true progress rests on its rural economy and for India, it is highly important because a vast majority of its population falls in the rural sector. The more this section of the population is encouraged to access financial services from a private bank like IDFC FIRST Bank, which offers several beneficial options, or even the public-sector ones, the more economically independent they will become. 

 

Disclaimer

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