Digital Inclusion of Micro-Entrepreneurs

• India is currently in the midst of a large effort to modernize its financial services and move individuals into the electronic financial space. One of the biggest initiatives launched by the government is “Digital India” to ensure that government services are made available to citizens electronically by improved on line infrastructure and by increasing Internet connectivity.
• Micro and small enterprises (MSEs) provide a significant opportunity for employment generation. MSEs can adopt digital payment systems which will provide them an opportunity not only to grow the businesses, also empower and equip to move from cash based to digital payment systems, enhance their money management and business skills while establishing a strong foundation for economic development. Adopting digital is a path towards financial inclusion of MSEs and their customers.

• It was felt that Mobile Literacy Lab campaigns on digital financial literacy can be used at remote / under served areas for information to micro entrepreneurs in using digital avenues to strengthen and expand small business. The doorstep sensitization will addresses the time convenience and proximity barriers faced by people in accessing information on new digital channels.

• Government agencies have undertaken initiatives for improving digital inclusion of micro-entrepreneurs and improve sensitization on digital financial literacy among rural masses including micro entrepreneurs, farmers and artisans.

• Many villagers have smart phone access, generally the youth, who have been using Facebook and downloaded apps from Google Play store. It was shared that they took help of others to download apps and not sure if they have an email address. Mobile phone stores, Photography and video editing shop owners generally have working email address in rural India.

• It is observed that digital financial literacy has been poor in rural areas. Though , few youths have knowledge about mobile wallets (Paytm and Phone Pe etc.), but they needed to acquire skills and inculcate habits to effectively use digital devices for financial transactions.

• Digital awareness and use of digital options are hardly found among village entrepreneurs. Though some entrepreneurs were observed using Paytm for receiving and making payments.

• Illiteracy is high; those who are literate are comfortable with Hindi language-based interfaces. Due to low literacy/understanding of English language, many of them distrust digital options.

• Understanding of interface, safety and security are the top priorities for people who like to use digital options for financial transactions. 

• Village entrepreneurship is limited to petty kirana shops, tea stalls, and seasonal agri input stores. Generally, there are two to three shops in a moderately sized village.

• Village entrepreneurs deal in cash, for shifting to digital platform they may require usage support and volume. 

• 2.5 lakh Gram Panchyats may have access WiFi using Bharatnet. The incessant access may then facilitate opting digital mode of financial transactions.

Following was observed at field areas of Uttar Pradesh and Bihar :-

• There are multiple barriers to adoption of digital finance such as illiteracy, lack of Hindi language-based interfaces, knowledge and trust barriers.

• Increasing financial and digital literacy is crucial for entrepreneurs, but it requires person-to-person engagement and digital training tools especially at usage level.

• Long term initiatives to acquaint village entrepreneurs with digital banking is required to be undertaken.

Thanks for Reading.