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Organizational and Policy Challenges of the Rural Frontier

Organizational and Policy Challenges of the Rural Frontier. Rekha Jain rekha@iimahd.ernet.in. Mobile Internet Penetration in IndiaSources: GSM Association of India. Rural Profile. Top 20% Rural Households. Farm Income. Relative Size of Rural Markets.

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Organizational and Policy Challenges of the Rural Frontier

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  1. Organizational and Policy Challenges of the Rural Frontier Rekha Jain rekha@iimahd.ernet.in

  2. Mobile Internet Penetration in IndiaSources: GSM Association of India

  3. Rural Profile Top 20% Rural Households Farm Income

  4. Relative Size of Rural Markets • There are almost twice as many 'lower middle income' households in rural areas as in the urban areas. • At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. • Middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. • In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.

  5. Emerging Profile Rural Markets • Changing fast • Large, Comparison with urban • Not homogenous mass (Customized services) • Services and products may not be directly be adopted from urban markets • For many rural consumers, first experience of service may not be through physical infrastructure (banks, health, education)

  6. Examples from Banking and Agri advisory

  7. Examples from Banking and Agri advisory

  8. Predominantly cash economy, a large informal sector, with many people employed casually. • An important proportion of overall economic activity. Extent of Financial Exclusion Source: bda: Overview of Mobile Banking and Convergence, FICCI Communications & Digital Economy Committee, September 2008.

  9. Enhancing Services: Policy and Regulation • Business Correspondent model • No Frills Account • Financial Inclusion mandates and Fund (support IT) • NREGS

  10. Rural Banking • Focus on opening “no Frill Accounts” (especially since banking correspondent model in January 2006) • From 0.5 million in March 2005, at least 33 million by March 2009, (many accounts non-functional). • Only 11% of 25.1 million such basic banking accounts, opened between April 2007 and May 2009, are operational. • Rural bank branches only 5.2% of the country’s 650,000 villages. • Access to credit: very limited

  11. Retrieving Data Stored Already

  12. mKRISHI – Mobile Agriculture Provide personalized advice to the farmers on fertilizers / pesticide based on the current parameters like location , crop image, prevailing environment condition in the native language.. Benefits Accurate Advice based on facts and prevailing conditions. Empowerment of farmers with current market information. mKrishi knowledge base can be utilized by universities and expert to understand crop, micro and macro pattern in the Indian context.

  13. Motivation - Bridging the Gap Bank Servers ExpertAdvice from Agriculture Universities & Research Institutes Weather Servers Government Servers Internet CDMA Network National Commodities Exchange Village Knowledge Center Local Markets Soil Sensors

  14. Process Description 3. Parse information & retrieve accurate advice 4. Prepare and Send SMS in Local Language Data Consolidation Unit Agriculture expert database 2. Consolidate 1. Sensors Collect Soil Data 5. SMS to Farmer in Local Vernacular

  15. Challenges of Rural Telecom Service • Integrating the physical supply chain with the electronic • Converting the supply chain to electronic • Last mile: Selection of village level institutions and individuals • Veracity of information, dealing with complexity of linkages • Supporting Innovation in start ups

  16. Challenges of Rural Telecom Services • How to link the customers to the services • Technology as the enabler. But is that enough? • Development of an ecosystem • Technological innovations (speech recognition, low cost ATMs, tele health devices) • Entrepreneurship: Linking the solutions to target village consumer groups (Seed and angel funding, institutional support) • Private enterprises (village level entrepreneur), creating several services on a single platform: Mobile: PC (CSC) • Integrating services and payments • Scaling Up

  17. Critical Elements: The Two Ecosystems R&D (Technical and Market) (Speech recognition,NFC) Rural Citizen Business/Information Ecosystem (what services, cost, intermediaries) Innovation Ecosystem (Incubators, Seed and Angel Funding)

  18. Regulatory Issues • Publicly funded research USOF support • Facilitating services (banking, proportionate regulation, NREGS) • Framework for regulation (Interoperability, security )

  19. Thank You

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