ⓘ Featured image: PayNearby founders, from left: Anand Kumar Bajaj, Yashwant Lodha, Subhash Kumar, Rajesh Jha
In its bid to offer financial liberation to the masses, PayNearby, India’s largest hyperlocal fintech startup, this Independence Day, has launched a module to bring the best of banking offerings – Nivesh (Savings), Udhaar (Lending), Suraksha (Insurance) and Payments at a store nearby. The platform is tailored to offer customised products, relevant to all income cohorts ushering in true financial inclusion. Through its latest congregated platform, PayNearby aims to provide best of technology advancements, India Stack and leading banking and processing partnerships at the last mile.
Even as the government’s Pradhan Mantri Jan Dhan Yojana (PMJDY) initiative ensured that about 80% of the Indian population has a bank account, over 48% of them remain inactive with no transactions in the last one year. Additionally, according to the Indian Monetary Fund, only 13% of Indians make use of formal channels to borrow money. The rest rely on alternative methods like their local moneylenders, who often charge exorbitant interest rates, pushing them into an inevitable poverty cycle. Furthermore, India’s insurance penetration is just over 3%, due to high premiums and erratic earnings – leaving them bereft of an insurance cover. According to the India Savings Report, an independent study conducted by PayNearby this year, 60% of the low income cohort do not have access to a formal savings product, and continue to save either with a chit fund, or informal mechanisms like under the mattress.
Financial inclusion in a diverse country like India requires customised treatment encapsulating the different dimensions of the populations while offering a gamut of services. Lack of financial literacy plays a huge part in why documentation intimidates the population, while a scarcity of traditional financial institutions also requires them to travel long distances, often sacrificing day wages. Thus, the segment is forced to rely on age-old informal mechanisms, which are often insufficient, unreliable and expensive. When coupled with information asymmetries and high transaction costs, the poor who lack collateral or credit histories are stuck in a bad equilibrium with no escape.
In the post COVID world, the realisation that efforts need to be made to bolster our health and economic infrastructure became more evident. For citizens to have a safety net, when met with life’s unexpected events, it is important that people across all income cohorts have the awareness and infrastructure to save for the rainy day, protect themselves with the right insurance products and raise funds easily when necessary.
PayNearby’s latest offering of a combined module, Nivesh (Savings), Udhaar (Lending), Suraksha (Insurance) and Payments, meets these needs through a single platform that simplifies high-end technology and brings it to the hinterlands of the country. The Insura