Rural marketing

{Marketing of services

In the rural India

Two critical needs of rural people

• Micro saving

• Frequent withdrawals

Marketer challenge

• Low deposit

• Credit penetration

• Low average values

Financial Services in Rural

Poor access or usage of services

Economic state of the rural population

Lack of physical infrastructure facilities

Regulatory Constraints

Economics of the rural banking

Usage – illiteracy; incomplete service offering bybanks, high transaction cost in the formalbanking system

Banking Services

Financial Products distributed by two systems

• Branch Delivery

• Non-branch system

Non-branch system – mobile ATM, smart cards, mobile banking, SHG’s, MFI’s, Post offices & the business correspondent/facilitators model.

Banking Services

Business correspondent Model(BC)

• Under this model, the intermediaries chosen tospread banking services are called businessFacilitators

• Facilitators identify borrowers, process loansapplications, and create awareness

• Bank also uses NGO’s, microfinanceinstitutions, post offices, non-banking financecompanies and retired bank employees; andrecently petrol pumps, provision stores,pharmacies, fair price shops

Banking distribution channel

Is defined as the provision of thrift, credit andother loan products of very small amounts topoor people to enable them to improve theirquality of life.

SHG-Bank linkage model- SHG financed bycommercial banks, regional rural bank andcorporative banks.

MFI-Bank linkage model- MFIs financed bybanking agencies for on-lending to SHGs andother small borrowers covered under themicrofinance sector.

Microfinance

Kisan credit card- KCC is a revolving cash creditfacility with unlimited withdrawals and repayment,with the credit limit based on operational landholding, copping pattern and scale of finance.

KCC introduced by GOI in 98-99, aims to provideadequate and timely financial support from thebanking system to the farmers for their short termneeds, primarily for the agriculture.

It is in the form of a bank saving passbook.

Credit services

Chit Funds- famous in the rural south Indialike committee system in the north India

Credit services

Life insurance

Non-life insurance

Insurance

Non-life insurance - direct mail, direct sales force, insurance agents, agreements with corporations, banks, real estate companies etc

Life insurance companies - Agents

Distribution of Insurance Products

Banc assurance, brokers, direct selling agents, corporate agents such as NBFCs, NGOs, MFIs, SHGs

Private players ties with public-sector banks, corporative banks and RRBs

Tied up with HUL, ITC for e.g. – ICICI &

e-choupals

Micro-insurance

Emergence of new distribution channel

Page number 247-255 Rural marketing 2nd

Edition Pradeep Kashyap

Reference

Harish Vasdev

CUHP13MBA29

MBA 3rd Semester (Marketing & Supply chainmanagement)

Central University of Himachal Pradesh

Email- [email protected]

LinkedIn- in.linkedin.com/in/harishvasdev

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