While the pandemic has created huge difficulties for all of us, some have sought to transform the crisis into an opportunity, not just for themselves but also for their communities. The four student entrepreneurs behind Rural Invest, Naman Tekriwal, Madhav Sharma, Satyam Mehta and Raghav Sharma are trying to achieve something similar.
Rural Invest is an organization aiming to spread financial literacy amongst India’s rural population. The following are snippets of a rivetting conversation I had with the CEO and Co-Founder of Rural Invest, Naman Tekriwal.
How did the idea of rural invest come about and what is its genesis?
Back in 2017, all four founders of this company Rural Invest were involved in another venture called High School Investors. What High School Investors did was promoting financial literacy amongst high school students in India and we went from school to school promoting financial literacy. The idea was that if high school students could invest money (their pocket money and such) in mutual funds they would be able to save for their future educational goals. That is how we got exposed to the mutual fund industry. We became quite successful and we were able to amass asset management of about $300,000. We were also listed as one of the top 25 startups in India by NASDAQ’s Milestone Makers program.
So the seed and the idea of Rural Invest was sown back in 2017 but in December 2019 when I flew back from Hong Kong and we started experiencing the effects COVID-19, that became a catalyst for Rural Invest. Seeing the interviews and stories on migrant workers and how they did not have the money to eat and for other necessities, we got thinking that if they would have invested in mutual funds let say 2-3 years back they would have had the liquidity to survive through these times.
The Prime Minister’s vision of having a Digital India, a financially literate India and an Aatmanirbhar Bharat only depend on how much we can tap the potential of the untapped rural population.
Because 60% of the country is still rural which is why we are not able to tap the next billion users. The focus of ‘the next billion users’ movement is in India and most of that population does not have access to basic literacy so the question for us was how can we make a simplified digital portal which can let them know what it is they’re doing, which becomes financial literacy, and then include them into the financial system by allowing them to invest in financial instruments making sure that they get access to financial stability and security for their future.
There are a lot of policy changes that have been introduced in the country over the last few years particularly since 2014. According to you and specifically regarding your prospective market base would you characterize these changes as mostly positive or negative?
Honestly, it is a mix of both. In terms of policies, some great changes have been introduced for example Digital India. Rural Invest completely alines itself with the idea of Digital India because we understand that unless India becomes 100% digital we won’t be able to have the same impact that other established, developed economies have had, so Digital India we completely agree with but the process of getting involved with financial instruments needs to be further simplified because there are so many rules and regulations around them that it can be almost intimidating for laymen.
We have partnered with National Payments Corporation of India and their attention has been on promoting the fact that you need to make digital payments and you need to have access to basic digital and financial literacy and that is great but a lot of groundwork has yet to be done. A lot of people that are making these policies might not be completely aware of the ground reality.
In Urban India, we have gone through a transition from paper money to plastic and now to applications like Paytm but rural India has skipped a lot of the intermediary steps between cash transactions and digital transactions. Do you think that this will affect their ability to adapt to new financial transaction systems?
Today, 70% of the Metropolitan cities are using a mobile application like Paytm but what we have to remember is that the rural people did not get such exposure. Even though digital literacy may be increasing, in terms of the use of smartphones etcetera, there is a lot of mistrust in these new payment mechanisms. For them, cash is still the primary mode of saving money. I think what they need to understand is that your cash will not multiply and your cash will not give you more money unless you invest it into a money-making instrument which could be a financial institution or the financial market.
How can Rural Invest help with this?
At Rural Invest, we intend to target 3 tiers of people. The first would be blue-collar workers or first-generation urban population that hasn’t had much education. The second-tier, people living in like small cities where there is some digital literacy and they might even have bank accounts but they might not know how to completely operate them. The third tier is rural and remote population and I have to admit that this tier is the most difficult to reach out to, especially during the time of COVID-19. Before this happened we reached out to 15 villages in Haryana and Punjab that we would go to and run a pilot project and start with basic financial literacy and tell them as to why is it important to invest in financial instruments but all that has now been put on hold.