Today we are amazed to see how IT has changed the life of a normal Urban Indian. We see the applications of IT in banking, insurance, ticketing (Air, rail, buses etc) and find how our life has become easier by online banking, e-ticketing, e-filing of taxes. Compare the banking 10-15 years back when it was a full time task to do the day to day banking. It is the IT which has made banking industry grow at such a fast pace. Leveraging technology, the new age bankers have changed the skyline of consumer finance sector, which has led to a tremendous growth in the key sectors of economy like automobiles, consumer durables, housing, banking and financial sectors along with the IT and ITES. Thus we are experiencing the snowballing effect of growth in Information Technology in the Indian economy. This is one side of the story because all these action is seen in the Urban part of the country whereas the rural sector is still grappling with the age old system. If we can replicate the similar action in the rural sector we can see India emerging as an economic super power in a very short term. In this article I shall dvelve as to how can rural India be benefited if the banking sector break the ice to become the growth engine of agrarian eonomy.
These days we are witnessing a large number of farmers committing suicides which is becoming serious proposition day by day, such that the government is puzzled to find out a lasting solution of this menace. Prime minister Dr. Manmohan Singh toured the districts of Vidarbha to address to this problem, thereafter a package was announced for the benefit of farmers but the problem has not yet mitigated rather the rate of suicides are increased thereafter.
Due to our experience of working in the rural area we have realized that the reason for farmers suicide is due to the fact that in rural area people are loosing the hope for a bright future due to absence of any system which address to their need of economic upliftment, on a perpetuel basis. We find that governemnts occassionally announce some ineterst waiver, loan -waiver kind of sops but the real need is to help them earn in a dignified way which is still a problem due to absence of access to banking, finance, market linkages, transportation service and consultancy and technical support to be in tune with the time whereas due to access to the media the aspirations of rural folks are raising equally as of their urban brethern.
We find that ICT is a ray of hope which applied thought fully and whole heartedly can adress to a large number of farmers problems. I shall be presenting a series of ICT application which if clubbed with the innovative business acumen shall be a potent tool which has the power to change the scenario of rural India as we have witnessed in urban India in last couple of decades. Let us take the banking first and foremost.
We know that it has been the policy of the government to treat rural lending a priority sector and government spends a huge amount of taxpayers money to make agriculture lending cheaper. Even though if we make an assessment of how much the farmers are benefited by this we find it to be dismal. The question is how much cost a farmer has to bear to get a loan first an foremost the bank has to be accessible to the farmers, but it is also true that opening a branch is not feasible in the rural area. Second problem is that in order to complete the documentation and formalities the farmers have to spend a lot of amount as they have to spend a handsome amount on getting the land record documents, photographs, photocopies and inumerable rounds to different places to get their compete set of documents prepared. Thus after spending these amounts which is uniform to all the farmers some farmers have to shell out extra amount to the middlemen who are involved to get the loan to these people. Therefore whatever the interest rates shall be but the cost of getting the loan from the nationalized banks to the farmers is very high and is so tedious that the farmer prefers to take it from high cost sources in form of input credit or money lender which is also very dangerous for his financial future.
The solution for this menace is to make farm loan more accesible and trouble free by utilizing rural IT kiosks as the facilitators to the farmers in getting farm loans. These IT kiosks can do the following task to facilitate the banking
Prospecting the farmers about the Farm loan
Counselling for various lending options and their procedures
Helping the farmers in documentation
Photography, Photocopying and assisatnce in the compliances
Thus the farmers can get the services similar to what we get in cities by the DSAs of banks and telecom companies who get the serces at their door step. We must be clear that it is the the accessiblity and the convinience which plays an important role in the growth of any service. The same phenomena has led to growth in Housing, automobile consumer durables, credit cat and personal finance growth.
We have some models of village level IT kiosks in the country which can be tried by the nationalized banks for the benefit of farmers. Onne such example is Gramdoot model in Wardha district of maharashtra where there are more than 70 Kiosks upto the village level having basic IT infrastructure with a dedicated person manning the kiosk on the full time basis. These kiosks are offering various eGovernance services and the most important is the land record documents which are required in getting the crop loan. Thus if banks wishes to utilize the services of this existing network bank need not do any capital investment in getting nearer to the farmers the farmers can get complete couselling from such centers and get the documentation services and go to the branch fully prepared and thereon the banks can do the due diligence before sanctioning the loans. This kind of arrangement shall be a low cost and high effect revolution in the rural banking. Bank can further utilize such kiosks for all kind of lending as well as variuos other IT enabled services off-corse by safeguarding it's interests.
Here lies a solution for our policy makers to address to the problem of lack of developement in the rural India and make Information technology an engine for growth of rural economy. With the increase in banking and public funding in the farming economy there will be more technical and manegiral skills forthcoming which shall lead to growth in the allied sectors like transportaion, primary processing, warehousing, insurance, post and pre harvesting technologies etc. which means more per capita income in the rural area more spending, better facilities, reverse brain train, more entreprenuership and decentralization of economic growth resulting in an overall growth of the economy.
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