Saturday, January 28, 2017

India's First Cashless village

Global Parli goes “Cashless”

By Chetan Temkar (Mob: 9892452492)
This is a story about how the transformation of 15 villages in Beed district turned out to be the catalyst for a cashless revolution.
After quitting AAP due to internal squabbling and non-adherence to core principles of transparency, Mr. Mayank Gandhi decided to return back to corporate life. He started working with a start-up which got to the funding stage. Meanwhile he read some articles about the drought in Beed district where people were rumoured to be sipping the leftover water thrown from cars on the road.
Mayank was disturbed by the reports and decided to go and have a look for himself.  He surveyed the area and found out that there indeed was a severe shortage of even drinking water. Some parts of this area were covered by Government schemes while others weren't. Mayank quit his job and took over the task of supplying water to a cluster of 38 villages with around 60,000 people. With the goodwill that he had earned in his India against Corruption and AAP days, he asked people to donate for tankers and organized the whole effort that supplied 1.57 crore litres of water until the rains.
After this exercise, he realized that even though the water effort was necessary and critical at that time, it was only a temporary fix; a bandaid. Something more permanent needed to be done. With the help of some volunteers, he did an on ground survey and started the Global Parli project. The mission was simple and succinctly put - to increase the per capita income of the villages by 250%, with accompanying human development. He chose 15 villages instead of one to make a statistically acceptable sample with enough variation to take care of anomalies.
Global Parli is a lab where methods and techniques will be developed which can be applied to the entire country.
My partner Dipesh and I met Mayank when we worked together on the private venture that he was leading. Our company Jump in Jump out Technologies was building the underlying technology for Mayank's company. I had left a cushy job in the US to come back to India to make a change. Life in the US was comfortable and the fear was about falling into a comfortable lull, where one started living in a bubble oblivious to the suffering of others and pontificating how they should improve their lives.
My father used to say that after a lot of good karma, you get a human life. It’s not enough to just have a family and take care of it. You have to make a difference in at least 100 families to justify your birth. Hence, I came back to India to do something worthwhile.
When I came back, my two friends Prakash and Vasudha started an organization called V-Excel ( with an intention of creating special education teachers, something which India sorely lacked. We built a model school in Chennai and now V-excel serves thousands of special children through the school, its branches and the teachers it has trained. The model is being used in 8 schools in Tamil Nadu and Maharashtra and is being replicated all over India.
I am also one of the founder trustees of Mumbai Environmental and Social Network, which works on issues in public transport in Mumbai and promotes sustainable mobility.
Dipesh and I have also created a suite of free mobile app modules called SmartShehar that aids commuters in Mumbai and also gets them involved in helping the municipal corporation with problems like potholes, garbage disposal, traffic and parking in the city.
With this background, it was fitting to get involved in Global Parli as this would be a far reaching project, reaching lakhs of people and with the potential to transform rural India. Mayank’s genuineness and easy style of working attracts the best talent to work with him.
Dipesh and I took over the IT pillar of Global Parli and started thinking of different ideas using technology for education, internet etc. We visited the villages for a ground survey and to our surprise we found that most households had at least one Android phone with an internet connection.
Then, the PM dropped the D-bomb (demonetization). The media was full of reports of the suffering of the poorest of the poor in villages. I spoke to Mayank and said that we should make sure that our villages were not suffering and see what we could do for them. He asked me to take charge and said that he would provide whatever assistance that was required from Global Parli.
The people at Global Parli turned out to be some of the best people that I have worked with. Apart from Mayank, Bhairavi is a superwoman who not only handles everything on the ground, but she even has time to wake up at 4 am to co-ordinate ground transport for us. Always smiling and perennially helpful, she is easily one of the most productive and efficient people I have known. I was assisted by Renuka and Sanskriti on the ground, two eager young girls who became indispensable to me for this project.
The first thing we did just after the demonetization exercise was to visit the villages and understand how it had affected their lives. We were surprised to find out that even though there was so much chaos in the cities, most of the villagers were hardly affected. Kind of strange, isn’t it? This is why. The average household income in the villages that we work in is Rs. 3,500. When we asked them, the villagers said, do you really think we have 1,000 and 500 rupee notes? Next, I asked them about how they withdrew cash. Their answer was that it has been always difficult for us to go to banks and get cash. We learnt that they have to travel far, stand in lines and receive lousy service at the bank. They added that this time they just had to wait a few hours longer. We realised that they were very stoic about the whole thing and were in support of the government’s move because they could clearly see that it was inconveniencing the rich more and they could sense instinctively that it would help them in the long run. Short term pain for long term gain.
Figure 1 Crowd outside banks

With this knowledge, we took our first step to select a village that would be our test case to go cashless. For two months, we visited all the villages under Global Parli, spoke to the people, and analyzed the various elements that were needed to ease this transition. For us, going cashless was not just installing point of sales (PoS) machines, but a combination of all available methods like UPI (BHIM app) and USSD. PoS machines are for people who do not have smart phones or have a problem using smartphones, USSD is for people with feature phones but our most preferred option was UPI (BHIM app) as it does not have transaction charges just like cash transactions do not. Also it works from villager to vendor, vendor to villager and villager to villager, again just like cash transactions. Thus this would be a seamless transition from a cash-based economy to a cashless one.
When we started, we thought it would just entail training people to use the technology, which we succeeded in doing for a few people and get them to use their phones to make transactions. However, the problem was multifold, sometimes they didn’t have balance and their phones to send an SMS which was essential for the app to work, and sometimes internet connection were patchy. The main problem though was the bank accounts. Most villages are ‘adopted’ by a particular bank. This means that most of their loans and government subsidies come through that bank. Unfortunately for us, most of the villages that we work with were served by Maharashtra Gramin bank which is not one of the 31 banks that offer UPI and is also technologically backward. This means that this bank is not equipped to handle UPI which almost brought our effort of going ‘real cashless’ to a complete halt. Some of the villagers did have accounts with State Bank of India, which is UPI compliant, but most of these accounts were either defunct because of no activity or did not have ATM cards, which is again essential for UPI.  We connected with SBI, which being a government monolith is slow to move but did help us to get some accounts activated.
Figure 2 UPI apps being downloaded on rooftops as it is the place to get the best internet network.

While we were struggling with this, the zonal head of HDFC bank contacted Mayank and showed interest in working with us. He actually made the effort to visit the villages which happened to coincide with the District Collector’s visit. The collector of Beed district, Mr. Naval Kishore Ram is a young, dynamic officer who understand the needs of the villagers intrinsically and has gone out of his way to help us in this project. Some of the things that Global Parli does would either be far too difficult or impossible to do without his help. HDFC Bank’s zonal head was thoroughly impressed by the work we were doing and the support that we were getting from the Collector. Immediately after his trip, HDFC came on board to help us create a cashless village.
Figure 3 Meeting with the HDFC team in Mumbai
Our two month long research helped us narrow down the criteria for selecting the first village that we would start working in. We selected Aurangpur based on good internet connectivity, enthusiastic villagers, cooperative Sarpanch and active bank usage. With the help of HDFC Bank, we conducted a banking literacy camp and also showed them videos about the importance of banking. HDFC Bank started opening new accounts and we decided to first start with the women since they always had issues getting bank accounts. Once the accounts were ready, we helped the villagers install the HDFC Bank mobile banking app and also the BHIM app and get them both activated. The effort required long days of work starting from 8 am to 11.30 pm some days to get the ball rolling. We were surprised though to see that some of the young boys in the villages learned to transact with each other using UPI on the first day itself with about an hour’s training. Kudos to Renuka and Sanskriti for having the patience to handhold them till they got it.
Figure 4 Account opening by HDFC Bank in Aurangpur village
Figure 5 Videos been shown on the importance of banking, during the financial literacy camp at Aurangpur.
So far so good. The girls transferred ten rupees to some people and then told them to start passing it around, giving a rupee each to their friends. Ten youngsters had started using UPI, on a small scale though, but this was a very fruitful and rewarding experience to actually experience how cashless could work in our villages.

The next issue was how to incentivize people to put money in their accounts. Though some people immediately understood the utility and deposited money, others would have to be pushed to use this system. This meant that we needed to target a regular transaction that if made cashless, would ease their routine life. Once they had that one transaction that they did using their mobile, they would get hooked and then the transition would be easier.
Guess what this turned out to be. The ubiquitous ‘phone recharge’! Something that everybody does, all the time. For a recharge, the villagers had to go to the nearest town which was at least 3 km away or sometimes even 10 km or more. Plus most people tend to do small recharges, which meant that they would have to do this every few days. With the app and the bank account, they could now do it instantly without any travel or effort. This struck a chord with the villagers. Post that, they learnt other facilities on the mobile app like NEFT themselves and were thrilled with the effortlessness with which they could transfer money to anyone, sitting in their village. Now the people who did not have Android phones were giving money to the young kids to do recharges for them.
What our experience taught us is that what started as a purely technical problem of using apps for cashless transactions, turned out to be a bigger problem of financial inclusion. We realized that we could use the demonetization fear to get people to use the banking system. Once the villagers started using banks, they could get out of the clutches of the high interest money lenders who at times charge more than 100% interest per annum.
To get the village vendors and the nearby towns into the cashless system, we plan to get them discounted PoS machines from HDFC Bank and UPI. In the future, we will set up Aadhar based thumbprint devices. We have already started this in a small town near Aurangpur called Shirsala where at least 20 vendors will be given PoS machines and UPI. Given that all the villagers have Rupay cards or Android phones, we should be able to cover most cases to reduce the use of cash.
Figure 6 Opening of current accounts for vendors in the nearby town

1 comment:

  1. जमीनी अनुभव से विश्वसनीय. लोग समस्या का सामना करने के बजाय उसका फायदा लेना चाहते है. आप ने उसे समझ कर उसे दूर किया.. साधुवाद