Monday, November 07, 2005

Mobile service providers and banks

Indian mobile phone service providers are pushing the bar on innovative schemes. Theres the small recharge of 10 rupees (1 USD = 45 INR approx). Very recently such a small recharge could have been labelled unserviceable. Another service provider has a lower entry fee. Tata Indicom has come up with a 2 years incoming free without recharge. Advertised with a tagline - Insaan phone leta hai tarakki karne ke liye (Humans buy a phone to progress in life), it is a perfect pitch for a vegetable vendor (Incidentally, the protagonists in the ad are vegetable vendors or small businessmen), though I am not sure how many vegetable vendors would own television sets. Whichever way, these pitches are aimed at the right set of people. Profits at the bottom of the pyramid. I especially like Tata Indicoms pitch, because it locks the customer for 2 years in which time if he moves up in life, Tata Indicom will be with him. Customer development?

Coming to another much touted success segment, Indias private banking group. Indias private banks are models in the exact opposite sense. Citing high service costs and overheads and technology costs they have kept banking (especially banking technology like ATMs) away from the lower strata of society. (Most nationalised banks are a few steps better. Minimum balance is Rs. 100 for an account without a cheque book.)

Unless I am horribly wrong, there isnt any private banker who has tried to service the group which needs savings and benefits more than anybody else. In the age of micro payments and self help groups, where are the banks? Is a zero balance account that difficult to service? Micro savings and micro withdrawals are possible, but never tried. Why? Because our service is expensive.

Our banking sector can penetrate the population as much as the mobile service providers. This seems to be true the world over (with exceptions perhaps in Africa and Bangladesh), with banking being restricted to a financial elite. Where is the innovation?

1 comment:

kevinhil123 said...
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