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MIMO – Bridging the digital gap for the rural workforce

Posted on by MSC

This blog is about a startup in the Financial Inclusion Lab accelerator program, which is supported by some of the largest philanthropic organizations across the world – Bill & Melinda Gates Foundation, J.P. Morgan, Michael & Susan Dell Foundation, MetLife Foundation and Omidyar Network.

India has 15 million gig workers or around 40% of the freelance jobs offered globally, and this number has been growing steadily each year. A large proportion of the country’s school dropouts, college students, or partially employed people look out for part-time work to support themselves and their families. This kind of work, popularly known as “gig work”, is often unpredictable, unreliable, and unsustainable. In most cases, gig work arises out of a lack of full-time employment opportunities. Unsurprisingly, we find that the problem of underemployment is more acute in rural areas due to limited economic activities.

Sensing an opportunity to serve the gig economy, serial entrepreneur Lathika Regunathan founded MIMO or Minimum Investment Maximum Outcome. MIMO uses technology to help gig workers across India, especially in rural areas, enhance their earnings. Its mobile application intermediates between the service providers, such as banks and other institutions, and its field officers, typically underemployed youth. The application allows providers to set up a variety of regular and time-bound tasks that they want to outsource. MIMO assigns these tasks to geo-tagged and trained field officers within their chosen locations. The tasks typically include verification of credit card or loan application, collection of cash or documents, and so on. The app features also include analytics, dashboards, and a tracking management mechanism for service providers.  

The light-bulb moment

The idea of MIMO came into being when Lathika was working in Latin America in the financial services sector. She observed that the costs of customer acquisition and operations were high in rural areas, which prevented providers from being able to serve customers at the bottom of the pyramid in a feasible manner. Moreover, providers were not able to use a cost-effective platform to serve those customers, especially in locations that were hard to reach. She realized that her home country India must also be in a similar situation, and decided to relocate there soon after to start working on this problem.

The unique pitch

MIMO’s objective is to help the rural and semi-urban workforce take advantage of the digital revolution. Its field officers are generally school or college dropouts in tier 2, 3, and 4 cities. They work with MIMO to earn a livelihood while learning in the digital world. 

MIMO also helps financial service and other providers to reach rural markets cost-effectively. Providers find it difficult and expensive to serve customers due to a lack of last-mile infrastructure, distances, and remoteness of many areas. The cost of setting up an extended distribution network, particularly across dispersed rural areas, is high with low returns on investments. 

While MIMO allows providers to gain access to the trained workforce and skills closer to the customers that they serve, its field officers get access to opportunities to earn within their localities.

MIMO technology illustration

Figure 1: MIMO using technology to connect service providers to its customers. 

The impact on LMI segments

How to use MIMO appLathika believes that MIMO has a positive impact on the livelihood of field officers. MIMO offers them an opportunity to do respectable work that enhances their social status in the eyes of their communities. They are a part of the digital world and become socially included.

Ram Sahay, one of MIMO’s field officers shared his perspective. “I am proud to work with MIMO because unlike my peers, who must carry loads of documents or application forms to their clients, I work through MIMO’s mobile app to complete the same chores in half the time,” he said with a wide smile. Field officers have said that completing tasks for MIMO has increased their income by 20-30%. They also mentioned how their productivity has improved, as they can plan their days better. 

The roadblocks

Since its inception, one of the primary challenges MIMO faced was to gain and retain trust from its clients, primarily banks and other service providers. In the absence of visibility to the last mile, these clients had concerns about the credentials and capabilities of the field officers and lacked trust that the field officers could complete the work as per their requirements. 

It was much easier for MIMO to overcome challenges while training field officers in technology and application. These included simple things, such as taking the picture correctly, understanding the meaning of a completed form, and so on. It took more time and repeated training to impart soft skills around communication, presentation, and confidence while dealing with customers. 

Diversity in geographical regions has been another area of concern for MIMO. Nuances in work habits required MIMO to approach different states differently. In states, such as Bihar and Uttar Pradesh, MIMO struggled to get field officers to finish the tasks on their list in the allocated time. Field officers in the states in southern India are more disciplined and welcome additional tasks. 

The FI Lab support

CIIE.CO and MicroSave Consulting (MSC) conducted boot camps and diagnostic sessions to support MIMO. MSC conducted a strategic business planning session with the top management of the company. This exercise helped them think strategically beyond just survival. Through this exercise, MIMO could set medium- to long-term objectives and smart goals. According to Lathika, this helped streamline their internal processes and brought the team together. 

Before the workshop, the MIMO team faced issues that are typical to start-ups. The team lacked well-defined roles and responsibilities. For instance, one team member could end up performing an internal process that the other team member was an expert in, which reduced efficiencies. A lack of communication also contributed to such issues. The workshop allowed the heads of various teams to come together and understand the gaps in communication. They were subsequently able to allocate well-defined roles and responsibilities through mutual consent.  

Today, MIMO has reduced the turnaround time of their processes by 25% through better work allocation and by setting up communication standards within the company. The workshop and further handholding also transformed MIMO’s management to be more focused and impactful by prioritizing tasks aligned to the broader vision of the company. 

A quick diagnostic field study helped MIMO to understand different challenges that field officers face on the ground and to develop measures to address them. It also provided a fair commission structure based on industry standards.   

COVID-19: Turbulent times for MIMO and gig workers

Starting with just a couple of clients and 250 field officers in late 2017, MIMO, until February, 2020 served more than 70 clients through 10,800 field officers. With its operations spanning across 19 states in India, the future for MIMO looked promising. Then the coronavirus struck. The entire country was locked down. MIMO’s field operations were shut down completely and the clients reneged on their commitments to continue their business in these times.

Determined to survive, MIMO toyed with the idea of a video verification process. This is not a big, innovative transformation but a minor tweak to make the best use of the resources available: video calling. What started as an interim solution during the ongoing crisis has quickly picked up steam with both clients and field officers,  who have been working from home. The clients’ trust in MIMO’s quality of deliverables and the MIMO team’s ability to adopt the new process and train its willing field officers has started to show results. From almost zero transactions in the latter half of March to a couple of hundred today and a pipeline of two big clients joining in, MIMO could be doing even more transactions than the pre-COVID era. 

This blog post is part of a series that covers promising FinTechs that are making a difference to underserved communities. These start-ups receive support from the Financial Inclusion Lab accelerator program. The Lab is a part of CIIE.CO’s Bharat Inclusion Initiative and is co-powered by MSC. #TechForAll, #BuildingForBharat 

Impact of the COVID-19 pandemic on MSMEs: Indonesia report

Posted on by MSC

In Indonesia, large-scale social restrictions, falling consumer demand, and massive layoffs have affected all sectors of the economy. For the 64 million MSMEs operating in the country, this has caused severe disruptions in the supply chain and a drastic reduction in revenues.

Our report highlights the impact of COVID-19 on the MSME sector in Indonesia, particularly on micro-enterprises. We also provide policy recommendations to support the recovery of this sector.

Highlights of the webinar on “Successful cash support payments to the most vulnerable: Lessons from India”

Posted on by MSC

* 0:00 – 2:30 – Graham Wright – Welcome Note, Introductions of the esteemed panelists, and introduction to the agenda – Role of digital financial infrastructure in situations like the COVID and beyond

* 2:30 – 3:30 – Graham Wright – Highlighted India’s achievements on its digital financial infrastructure by stating 3 recent achievements and introduced Topic 1: Role of digital financial infrastructure in situations such as COVID-19 pandemic

* 3:30 – 4:00 – Question 1 for Mr. Rakesh Ranjan NITI Aayog – We understand that payments under the relief package for COVID -19 were made to the beneficiary’s accounts April 1 onwards. Given the scale, how was the cash transfer to over 200 million women managed using Jan Dhan accounts?

* 9:42 – 10:10 – Graham Wright – Introduction to Topic 2:Establishing India’s digital infrastructure

* 12:20 – 12:40 – Question 2 for Mr. Rakesh Ranjan – Most countries want to develop a robust digital financial infrastructure – but (as we know) this is not an easy task. What allowed India to pull this off?

* 17:30 – 18:25 – Question 3 for Mr. Dilip Asbe NPCI – NPCI’s journey has been a hectic and very successful one. What were the key enablers and the key milestones?

* 23:30 – 24:55 – Question 4 for Mr. Rajnish Kumar – SBI is the largest bank implements policies of the government, has integrated with a range of payment systems, and has developed a huge agent network. What did it take at SBI to ensure these happened and what was the most challenging?

* 34:05 – 34:40 – Graham Wright – Introduced topic 3: Practical insights from rolling out the (emergency) cash support transfers, covering both CICO agents and payment infrastructure * 34.44 – 35.20 – Question 5 for Mr. Amitabh Kant – The payments were made to beneficiaries in April and May, and this is in progress right now as we speak for June. What are some of the challenges that the government faced?

* 41:00 – 41:50 – Graham Wright – Significant increase in the agent network and their roles

* 41:51 – 41:42 – Question 6 for Mr. Rajnish Kumar – How has SBI managed these cash transfers? Did you also see a regional variation? How did SBI support its remote branches and its agents during this time?

* 47:10 – 47:30 – Question 7 for Ms. Greta Bull from The World Bank For emergency cash support transfers, which you have seen in other countries as well, what are the lessons/best practices that governments could learn? In particular, how can governments extend these payments into rural areas?

* 55:11 – 56:34 – Graham Wright – Topic 4: What might other countries learn from India?

* 56:35 – 57:10 – Question 8 for Mr. Hari Menon from Bill and Melinda Gates Foundation What according to you are the key points that make the digital infrastructure in India, unique? What can other countries learn for both during the pandemic and more sanguine times?

* 1:04:46 – 1:05:19 – Question 9 for Ms. Greta Bull from The World Bank – How would you compare India’s journey with others? What are the key lessons that other countries can take away?

* 1:09:00 – 1:09:25 – Question 10 for Ms. Greta Bull from The World Bank – India’s journey has been long and it is still underway. While we understand a solution of this scale will take some time to shape up, what might governments do to quicken this pace? Any quick wins that they can take in the journey to digitize G2P transfers?

* 01:12:26 – 1:12:50 – Graham Wright – Introduction to Topic 5: How can countries build digital infrastructure amid the Covid-19 crisis?

* 1:12:55 – 1:13:07 – Question 11 for Mr. Dilip Asbe NPC – How has COVID 19 has challenged the digital infrastructure and what will change after this emergency?

* 1:18:06 – 1:18:33 – Question 12 for Mr. Amitabh Kant – How can India support other developing nations?

* 1:23:36 – 1:24:40– Question 13 for Mr. Hari Menon – What are key elements that can drive the digital financial infrastructure, other than scalability as pointed out? What initiatives are the BMGF supporting to help governments roll out digital financial infrastructure?

* 1:29:30 – 1:29:50 – Question 14 for Mr. Rakesh Ranjan – The digital divide is really important and in the Indian subcontinent, the exclusion of women is often a problem. What is India doing to ensure that women are also included in the digital infrastructure?

* 1:32:50 – 1:38:33 – All the panelists Concluding thoughts and comments

PayAgri: Transforming the lives of small and marginal farmers

Posted on by MSC

This blog is about a startup under the Financial Inclusion Lab accelerator program, which is supported by some of the largest philanthropic organizations across the world – Bill & Melinda Gates Foundation, J.P. Morgan, Michael & Susan Dell Foundation, MetLife Foundation and Omidyar Network.

Factors responsible for inadequate share of small farmers

Around the world, small and marginal farmers get a meager share of the overall value created in the agriculture supply chain. This is mainly due to three critical inefficiencies, as highlighted in Figure 1. PayAgri is a platform for farmers that works to overcome them and optimize returns for the farmers. 

The founders of PayAgri, Rajeev J. Kaimal and Rajkumar KVM started their venture based on a strong need for a holistic solution that could improve the economic condition of farmers. They felt that piecemeal solutions are unlikely to create a desired and sustainable impact. 

Rajeev J Kaimal- Founder of PayAgri, Rajkumar KVM- Founder of PayAgri

Figure 2: Rajeev J Kaimal and Rajkumar KVM, the founders of PayAgri

Rajkumar is an investment banker who comes from an agricultural family in Theni, Tamil Nadu. Rajeev G. Kaimal worked in the rural banking and financial services space for over 18 years. In 2014, Rajeev became the founding member of Samunnati, a finance company that worked in the dairy value chain. Rajkumar joined later as a consultant to help build products and set up the company’s trading division. They saw the plight of small farmers in India as a problem that needed a solution—one they sought in the agricultural space. 

Their shared interest and common passion in agriculture prompted them to conceptualize PayAgri in February, 2017. Its objective is to use technology to create an inclusive economy that takes care of the aspirations of every player in the agriculture value chain without compromising on the interest of farmers.

Connecting farmers to lucrative markets

At present, small and marginal farmers take the smallest share of the consumer’s rupee in the entire value chain—under 30%. A large part of that goes to various intermediaries and is absorbed in market (mandi) fees and commissions of the Agricultural Produce Market Committee (APMC) markets (Figure 3). While intermediaries perform a critical role in the value chain, some optimization is necessary to help small and marginal farmers get a larger share of the overall pie. 

Typically, the farmers get fair prices for their grade A produce easily through retail vegetable vendors. Yet they struggle to find a market for grade B and grade C produce. Other factors like delay in payments by traders, non-transparent pricing, and limited technology go against the interest of small and marginal farmers.

Local agriculture supply chain

Figure 3: Local supply chain

Rajeev and Rajkumar realized that they could support farmers in terms of both market and financial linkages. Of the two, market linkage has been their current focus as it is easier to achieve and provides immediate relief to farmers. The FI lab supported PayAgri and its registered farmers to help farmers get a better price for their produce. This support also strengthened PayAgri’s forward linkages by:

  • Scoping out the existing purchase practices of vegetable vendors and small hotel owners in and around Chennai; 
  • Expanding markets for the farmers and providing a better pricing structure for their grade B and grade C produce;
  • Identifying market avenues for their produce in smaller hotels, roadside eating-outlets, and restaurants and by developing a suitable pricing strategy.

Further, PayAgri constructed a warehouse near the consumption hub to store farmers’ produce. Through these strategic steps, they were able to eliminate a few intermediaries and ensure better price realization for the farmers.

In the next round of technical assistance, the FI lab helped PayAgri conduct a baseline assessment to identify potential intervention areas and ascertain the priority to digitalize the Agri value chain in the Nilgiris district of Tamil Nadu. The findings of this study helped PayAgri assess the efficacy of its intervention to help the community to get higher returns on investment from the value chain of root vegetables. The program also initiated a pilot diagnostic study that supported PayAgri to build an impactful medium-term strategy on digitalization.

The impact on small and marginal farmers

Based on the digitalization strategy, most of the interventions from PayAgri fall under different types of linkages, such as: 

  • Input linkage (directly with input manufacturers)
  • Financial linkage (access to finance through banks or NBFCs)
  • Market linkage (directly with institutional buyers) 
  • Risk mitigation through insurance and
  • Technical support

The immediate requirement for small and marginal farmers is to facilitate market linkages and to help them to grade, sort, and package their produce. With its agri-hub model running in a few cities, PayAgri has been able to support the farmers in all these areas, resulting in better prices to farmers for their produce. 

With farm-gate procurement followed by grading and sorting, PayAgri offers 10-30% more to farmers, depending on the crop—zucchini, capsicum, carrot, coconut, grains, and fruit, among others. This has been a result of the elimination of intermediaries from the value chain and partnerships with last-mile corporates and other retailers (Figure 4). Until 2019, PayAgri had an impact on over 2,000 farmers in terms of better incomes, through its platform with transaction values totaling over INR 60 million (USD 790K).

Tech-enabled agriculture supply chain

Figure 4: Tech-enabled supply chain

Besides driving market linkages, PayAgri has influenced farmers to improve the soil quality by sourcing organic inputs, which will help the farmers in the long run. PayAgri’s plan to provide holistic support and digitalize the entire Agri value chain for such small and marginal farmers will not only bring about reforms and efficiencies into the value chain but also help these small farmers build digital footprints. These digital records will make them creditworthy for the formal lending or banking institutions to lend against.

Roadblocks 

“Working at the ground level is not an easy task”, says Rajeev, while speaking of the many hurdles that they encountered in the process. Although the current impact is a good start, PayAgri seeks to scale its operations and make the impact sustainable. Some of the major challenges that PayAgri faced or still faces are:

  • Convincing the farmers and Farmer Producer Companies (FPC) to work together;
  • Extensive reliance on cash transaction through the entire value chain, with no recordkeeping; 
  • Lack of digitized records of farmers that otherwise would have helped them get better access to financial services;
  • Gaining the farmers’ trust to share data remains just as elusive as getting them working capital from formal institutions at reasonable rates of interest.

COVID-19, the unlikely catalyst to PayAgri’s success

Due to the current pandemic situation, PayAgri has delayed implementing its long term strategy. However, in general, the pandemic has been a blessing in disguise for the start-up and for the farmers and clients it serves.

  • PayAgri has been able to find a product-market fit for itself. Since the lockdowns started, the government has permitted the delivery of essential goods and services alone. PayAgri has been quick to respond to this situation, as highlighted in Figure 5, by aligning its logistics and distribution infrastructures to procure essential goods, such as food items. It has obtained licenses to transport and deliver the goods to its customers through its warehouses in Chennai and Theni, Tamil Nadu.
  • PayAgri has validated its business model by earning sustainable margins and becoming a strong enabler in the agri-supply chain . PayAgri’s customers are mostly retail or institutional buyers of farmer produce. They have shortened their pay cycles to PayAgri from a week to a day as they value PayAgri’s timely and quality assured deliveries of goods. This has led to improved cash flows for the start-up, which has, in turn, utilized these gains to maintain prompt payment to farmers and mitigated the risk to the farmers’ financials. Overall, PayAgri’s business model translates to gains for both the supply and demand sides.

Sacks of rice and dal

Figure 5:  PayAgri successfully delivered 12 trucks of rice and pulses to six cities in seven days, serving the farmers and the community

  • PayAgri has been experimenting with the farm-to-home model and has been piloting deliveries of its warehouse inventory directly to homes while cutting out the intermediaries.
  • PayAgri has also been trying to scale up. It has started to pilot a franchisee model in Coimbatore, Tamil Nadu. In this model, while PayAgri links the relevant FPOs to the Coimbatore franchisee, the franchisee is responsible for taking care of logistics to procure from FPOs and sell to PayAgri’s customers. The franchisee pays a fixed fee to PayAgri per year. Through this franchise model, PayAgri will offload the CAPEX costs to its franchisees and become profitable and scalable in a short span of time.

This blog post is part of a series that covers promising FinTechs that are making a difference to underserved communities. These start-ups receive support from the Financial Inclusion Lab accelerator program. The Lab is a part of CIIE.CO’s Bharat Inclusion Initiative and is co-powered by MSC. #TechForAll, #BuildingForBharat 

Coping with COVID-19

Posted on by MSC

MSC conducted a research to understand how the low- and middle-income (LMI) segments cope with the #COVID-19 pandemic. To examine how this pandemic has affected their lives, we spoke with 604 low- and moderate-income households across Bangladesh, India, Indonesia, Kenya, and Uganda. Our report offers a glimpse into their remarkable achievements, underlying challenges, shocking misery, and new opportunities in these trying times.

ChitMonks: Simplifying chit funds

Posted on by MSC

This blog is about a startup under the Financial Inclusion Lab accelerator program, which is supported by some of the largest philanthropic organizations across the world – Bill & Melinda Gates Foundation, J.P. Morgan, Michael & Susan Dell Foundation, MetLife Foundation and Omidyar Network.

Vijay Babu—a 45-year-old entrepreneur, Gowri—a 29-year-old house help, and Venkata Garu—a 57-year-old government employee, are residents of the same city.  These individuals have another thing in common—they save through chit funds. An Indian “chit fund” is a traditional financial instrument that combines savings and borrowing.  It has the perks of a personal loan, a beesi, and a recurring deposit all rolled into one. In a classic Indian chit fund, several people pool their money and the lowest bidder in the auction held amongst group members claims the amount.The rest of the amount gets distributed equally among the other members. 

In India, chit funds come in three variants—those offered by the state governments, those started by registered companies, and those that are unregistered. The last variant is an informal chit fund that can be started between friends, families, and acquaintances. The first two are comparatively safer avenues for customers or subscribers to engage in. Chit funds allow bidders like Gowri to borrow any time during the chit period and set that off through regular monthly contributions until the end of the chit. 

The light-bulb moment

Founders of Chit MonksHowever, chit funds have often been confused with Ponzi schemes and other scams such as the widely publicized Saradha and Rose Valley frauds that have colored the public perception of chit funds.

Also, since the chit funds run by state governments or registered companies have large groups, many group members do not know each other, leading to a trust deficit among them.

Most registered chit funds do not follow best practices and maintain sloppy, physical transaction records of the group. These records are difficult to audit by the regulators and so, the anomalies and corrupt practices of the chit fund companies often go undetected until the scams such as the ones mentioned earlier, come to light.

These factors above have led to a generally negative public perception about business operations of registered chit fund companies.

Founders of Chit Monks

Pavan, Malla, Sridhar, the founders of Chitmonks, and Praveen wanted to solve these problems and bring transparency and order to the chit fund industry by digitizing it. These four founders or “monks” left their regular jobs and used their experience in banking and information technology to devise solutions. 

The unique pitch

Technology can lend transparency, which is what the chit fund sector needs to be more efficient and accountable in its operations. ChitMonks uses private commissioned blockchain technology across the entire life cycle of a registered chit fund to record the sequence of events immutably. The digitization starts from the registration of a chit fund company with the regulator and goes on to onboard and track the transactions of users subscribed to the chit fund. Besides, information on every event of the activities of the registered chit funds is visible to all related parties. This ensures transparency and integrity of the entire chit fund process on the blockchain. Since 2016, ChitMonks has used a smart contract-enabled blockchain platform to create solutions for the following three key issues that plague the sector:

  1. Arbitrary guarantor requirements: To hedge against the risk of default in payments by the subscribers, chit fund companies insist on three to five guarantors instead of just one. This is to pressurize the subscribers into making timely payments. However, it makes the subscribers uncomfortable to join chit funds because they fear these companies will divulge their delinquencies to their guarantors and harm their reputation in the community.
  2. Lack of transparency: The movement of funds at different stages is generally opaque in chit funds. This adversely affects the customers’ perception of chits. Despite the availability of flexi and quick loans, subscribers often wait for months to get the money they bid for.
  3. Limited visibility for local regulators: State-level regulators have limited visibility in chit operations and therefore lack the ability to solve the grievances of subscribers.

ChitMonks is one of the few startups that attempts to solve these issues from a “regulatory-first” perspective. 

The roadblocks

One of the key challenges for ChitMonks is to bring about behavioral changes in the way things have been done for decades. While its services have the potential to alter the course of the chit fund sector, ChitMonks faces several headwinds, mainly based on the traditional way of doing business. A few challenges are listed below:

Challenge faced by ChitMonks

Challenge faced by ChitMonks

  1. The chit fund companies are largely family businesses that are reluctant to change their operating procedures. This attitude is common and hinders the end-to-end digitization of chit operations.
  2. Subscribers need a guarantor to claim the bid money as they will have to continue to pay into the chit for the remainder of its rounds even after they have won the bid prize. Agreeing to be a guarantor is based more on trust rather than the real willingness to pay in case of a default. Subscribers are hence wary of digitizing this aspect of chit funds, as they fear it will be relatively more difficult to convince a guarantor to sign on a permanent digital record.
  3. Many state regulators are still paper-driven organizations. The blockchain implementation of chit fund processes is not just a digitization of existing processes but also a paradigm shift that involves a completely new suite of technologies. This is why most state regulatory bodies are reluctant to adapt to it.
  4. The state governments procure new technologies through a bidding system based on request for proposals (RFP), which requires a minimum of three bidders to compete.  Since it is one of the very few companies with such a technology and there are not sufficient number of bidders, the RFPs frequently get cancelled. Therefore, ChitMonks finds it difficult to secure the required government approvals to implement its solutions across India.

Support provided by the FI Lab 

CIIE.CO and MSC organized boot camps, diagnostic sessions, and clinics to build robust strategies and identify challenges that ChitMonks needs to overcome in order to scale its business. Through consulting support, ChitMonks understood several pain points to help its customers and companies in the long run. These included the provision of customer e-KYC to reduce the time taken to claim the prize money, along with e-auctions to improve accessibility and serve the customers better. The companies stand to gain from the digital verification of guarantors to assess their authenticity and reliability. In the long term, ChitMonks realized that a credit report based on chit repayments can act as an alternate scorecard to potentially secure loans from the bank. It also understood how to analyze the commitments of subscribers across the registered chit funds to help companies gauge the risk quotient of a potential subscriber.

The program also extensively mentored the team to build its investment readiness and enhanced its profile through evangelizing efforts. The support provided by the lab also helped the team assess and plan the rollout of these services in a phased manner, as elaborated in the section below. Overall, the FI lab acted as an extended co-founding member of the ChitMonks team.

Supporting chit fund companies and subscribers in times of Covid-19

Realizing the new world order with a focus on  social distancing, the Chitmonks team is in the final stage of building an appropriate B2B solution for its platform. They will roll out new feature within a month. It will:

  1. Digitize the process for collections from subscribers
  2. Automate and digitize the auction process. Chit funds can hold auction without any physical presence of either the subscribers or their representatives

For the subscribers, Chitmonks plan to roll out a mobile application which will:

  1. Enable online Know-Your-Customer (KYC) through e-verification using Aadhaar
  2. Integrate payment gateway(s) so that a subscriber can make presence-less payments to the chit fund companies

The long term goal

Steps to make chit fund simple, safe and accessible

Steps to make chit fund simple, safe and accessible

Once the pandemic is over, based on the recommendations from the program, ChitMonks will offer five value-added services. They will roll out these services, as illustrated in the adjoining figure, in a phased manner based on ease of execution and stakeholder acceptability. The services will not only help chit fund companies make their day-to-day operations more efficient, but also serve to improve their public image. 

The founders of ChitMonks are aware of the pitfalls of the sector as well as the opportunities it offers if the issues are addressed. The digital services of the firm can potentially put chit funds back on the map alongside favored products, such as mutual funds, credit cards, and recurring deposits. With the steady headway ChitMonks has made in re-engineering this veteran product, and its rapid entry in the states of Andhra Pradesh, Telangana, and Tamil Nadu, the face of chit funds is set to change for the better. 

This blog post is part of a series that covers promising FinTechs that are making a difference to underserved communities. These start-ups receive support from the Financial Inclusion Lab accelerator program. The Lab is a part of CIIE.CO’s Bharat Inclusion Initiative and is co-powered by MSC. #TechForAll, #BuildingForBharat