Rural fintech firm Spice Money plans to increase its footprint in Telangana, AP

Rural fintech company Spice Money through its million-strong network of Adhikaris serves the underbanked and unbanked sections of the rural population in the hinterlands where digital literacy is scarce. They assist rural citizens in availing essential services via digital means. “Spice Money already has got its presence in the southern States of our country and in the coming months, we are planning to increase our footprint in states like Telangana and Andhra Pradesh,” says Sanjeev Kumar, Co-founder & CEO, Spice Money, in an exclusive interview with Bizz Buzz

How has been the growth journey of Spice Money?

Our journey began with the vision of bridging the gap between rural and urban India by unlocking access to financial services for the masses across our country. With the commitment to cater to the underserved rural population, we at Spice Money have taken essential steps to provide rural consumers with a host of essential financial services. To offer these services to rural citizens, and to create additional income/ employment opportunities, we onboard aspiring merchants/ nanoprenuers (we call them Spice Money Adhikaris), making them self-reliant and financially independent as well. We have scaled exponentially with a 4x growth in FY22. We nearly doubled our Adhikari network to 1 million, clocked the highest customer GTV in the category of 1.4 lakh crore, and achieved the highest AEPS market share of 16.4 per cent in FY22.

We are building a marketplace to meet all essential banking and financial needs of rural citizens by offering a variety of products. Our phygital super app combines financial products with the presence of on-the-ground rural nanopreneurs, who use technology to serve underserved rural communities through an assisted digital business model. With a last-mile connectivity through our Adhikari network, our Open Network Assisted Digital Distribution (ONADD) model is now capable of integrating multiple partners, enabling them to take their services to the hinterlands of India.

What are the essential products and services offered by Spice Money?

We at Spice Money have been committed to addressing the access challenge across various sectors in rural India. We serve the underbanked and unbanked sections of the rural population through our million-strong network of Adhikaris. Our Adhikaris play an important part in the hinterlands where digital literacy is scarce. They assist rural citizens in availing essential services via digital means. These products and services include Aadhar Enabled Payment System (AePS), mini-ATM, cash management, DMT, Bill payment, and travel.

The near absence of digital literacy has stopped the average rural citizen from making use of the increased internet and mobile penetration, to avail of basic financial services. Even though almost 70 per cent of the population of our country resides in villages, only 20 per cent of ATMs are situated in these regions, with an average of ten ATMs per village. This meant the average rural citizen had to travel large distances to avail of basic banking services, or to make bill payments, or to manage cash.

With the presence of our local Adhikaris, rural residents only need to reach their nearest Spice Money outlet to get assistance on the process of cash deposits, payments, withdrawals, transfers etc. via digital tools and services like AePS, mATM, cash management, bill payments, recharge and travel. AePS is a great way to transact with only an Aadhar number and biometric verification, without the additional burden of carrying cheque books, or remembering bank account numbers etc. AePS also facilitates disbursements under government schemes like NREGA, pension, etc. At the Spice Money outlets, mATMs help with essential services like cash withdrawals and deposits, fund transfers, balance enquiry, etc. We also offer travel services enabling rural citizens to reach these outlets to avail of travel services like bookings, cancellations, and refunds, instead of travelling long distances and hours of waiting in queues.

How rural customers are different from their urban counterparts?

Over the past decade, India has witnessed an unforeseen increase in smartphone and internet penetration, not only across the urban centres, but also the rural regions. This boom has resulted in the emergence of new age tech-led startups that have been providing a host of different services.

The urban consumer has been reaping the benefits of these developments, with all major transactions, from ticketing to travel, to financial services taking the digital route. All major services are not available at the press of a button, and ecommerce, healthcare, hyperlocal deliveries, travel, entertainment are all preferentially done via smartphones. However, unlike their urban counterparts, the rural consumers have not been able to access the benefits of this digital revolution. Even though there has been substantial development in internet and smartphone penetration across rural regions, lack of digital literacy and scepticism around digital financial services comes in the way for rural citizens to avail the benefits of technology. Through an assisted model with the help of our local Adhikaris, we are able to build trust amongst the rural citizens by hand holding them in understanding each and every step, thereby making them comfortable with the digital processes and tech adoption.

While urban consumers are comfortable working with a multitude of apps on their smartphones, making transactions across the spectrum, the rural consumer is more comfortable with an assisted approach where their local Spice Money Adhikari helps them with their financial transactions and other essential services.

What are some of the top performing product offerings and what are the essential products in the pipeline?

Currently, the top performing products in our portfolio are AePS and mini-ATMs which we run across the length and breadth of our country. Along with this, we are developing a financial marketplace model that goes beyond basic banking and payment services, as well as a travel marketplace that provides holistic travel solutions. These products are available to the general public through the Spice Money super app. We are currently developing solutions for agricultural, insurance, and credit needs, to name a few, and intend to scale these solutions up for the benefit of people living in rural areas.

Why has Spice Money opted for a Phygital model and what role do Spice Money Adhikaris play in providing secure financial solutions to rural customers?

Due to lack of digital literacy, rural consumers are not comfortable working on a digital interface over financial transactions. Coupled with lack of awareness about digital products and services, there is a definite trust gap among this demographic. The rural consumer is more comfortable with an assisted approach where their local Spice Money Adhikari, who is also a member of the local community, helps them with their financial transactions and other essential services, with the help of digital tools.

We train our Adhikaris extensively in digital tools and products as they are regarded as trusted banking partners by their local communities, who get assistance from the Adhikaris to use digital tools for availing essential financial services. We chose a phygital approach to assist unbanked areas with physical and digital services for ease of use. This mode allows Adhikaris to function offline for the population that finds it challenging to work on apps and websites. Our local Adhikaris with their on ground presence help rural customers by becoming influencers in their local communities and help to bridge the trust gap between the common people and the financial service providers.

We customise our offerings and make them available to consumers because rural India is still a cash economy today, owing to the limited ability of banks to serve it. Our network, comprising more than 10 lakh Adhikaris, covers more than 18,000 pin codes, 700 districts, 2,50,000 villages and 5,000 blocks, serving over 10 crore households, covering 95 per cent of rural pin codes in India. We have recently started another initiative where our Adhikaris will assist our consumers in opening a DEMAT Account, applying for the LIC IPO, and investing in future products.

How is Spice Money training its Adhikaris, a state-wise breakup of Adhikaris?

We run our very own Spice Money Academy, which is a digital training platform, to provide financial and digital education to rural nanopreneurs in India. This is an industry-first initiative that has the ability to make a great impact on the lives of people. Spice Money Academy organises several virtual conference calls with industry experts providing our Adhikaris the best insights of the industry. We also organise on ground training sessions by our highly professional and knowledgeable sales team for regular training of our Adhikaris both for existing and new age technologies. We have a million plus strong Adhikari network across the country with most of our Adhikaris present in the north & central parts of India, followed by western and eastern India. Our focus is now on the southern states of the country where we are planning to expand with the help of our expertise to solve the problems of people living in those areas.

Top performing markets and new markets that Spice Money plans to enter this year.

We have over 20 million transacting customers on our platform each month, with 90 percent of them coming from semi-urban and rural areas, primarily from Uttar Pradesh, Bihar, Madhya Pradesh & Rajasthan. Our top performing state in terms of our market value is Uttar Pradesh, the most populous state in our country with a large population in rural areas followed by Bihar. We already have a presence in the southern states of our country and in the coming months, we are planning to increase our footprint in states like Telangana and Andhra Pradesh.