In our first blog in this series, we highlighted how the low- and middle-income (LMI) segments in India present immense opportunities for ecosystem players.
Concisely, the processes through which the ecosystem players can engage with the LMI market effectively requires rethinking from the ground-up. This rethinking would include a redesign of products and services, explorations around combination of digital and physical outreach efforts, and effective, pro-poor communication from the supplier-side. Incumbents need to collaborate with fintechs and build on their respective strengths. Moreover, considering the economics of the supply-side, certain experiments would require philanthropic capital to create viable business models.These players may include fintechs, incumbents, investors, and donors, among others. In the earlier blog, we also deliberated on how the ecosystem has been moving towards an inflexion point, and why the time is right for stakeholders to venture into this space. This blog is the concluding part in this series. It highlights how ecosystem players can serve the LMI market and tap its potential.
The exhibit below presents seven possible ways in which ecosystem players can tap the opportunities in the LMI market. These ways require innovation and re-engineering that focuses on client-centricity and spans channels, communication, products, and partnerships.
The need for a dedicated innovation lab
To boost the LMI space, an innovation lab dedicated to early-stage fintechs is a potential solution. MicroSave and CIIE, with support and guidance from J P Morgan, have used the research findings, their experience and expertise to conceptualise, set up, and manage a ‘Financial Inclusion Lab’.
The Fintech Inclusion Lab would aim to achieve the following:
- Be dedicated to provide customised support to the fintechs that focus on LMIs;
- Become a platform that brings together fintech start-ups that show an intent and willingness to serve the LMI segments;
- Support early-stage fintechs to innovate and provide digital financial solutions to the LMI market;
- Offer differentiated support, high-touch consulting, and local-level mentorship to the start-ups;
- Facilitate effective partnerships between fintech start-ups and incumbents that operate in the LMI space;
- Provide opportunities to fintechs to connect with investors which might be interested in follow-up funding for their business venture.
To support the larger innovation space, we will create and share learning and knowledge products in the public domain. Watch this space for more updates on the Lab.
Geo-cloning is the term given to the act of replicating successful business models from other geographies in a new geography.