In conversation with Dilip Modi, Chairman, DiGiSPICE Technologies Ltd
With empowered and technologically-sound teams, we are well on our way to reaching the goals laid out for our business; expresses Dilip Modi, Chairman, DiGiSPICE Technologies Ltd
What is your outlook on the Indian fintech industry? What are the key emerging trends that you are witnessing in the post-pandemic world particularly, in the rural markets?
The Government of India has been actively pushing for digital adoption since the launch of Digital India campaign in 2015. The outbreak of the pandemic has acted as a catalyst for accelerating the adoption of digitalisation in rural India with various rural fintech companies developing tailor-made solutions for the rural population. While rural fintechs started with providing basic banking and financial services, they are now leveraging their technological expertise to develop solutions for various segments including agriculture, insurance, credit, and travel bookings to name a few. The focus of rural fintechs is to scale up these solutions in the near future in collaboration with government initiatives for the development and augmentation of better infrastructure in rural India.
The key trend that has emerged from the rural sector is the penetration of smartphones and the internet. Smartphone penetration has almost doubled in a span of three years and as per data from the Annual Status of Education Report (ASER), the availability of smartphones in rural India was 36.5 per cent in 2018, which increased to 61.8 per cent in 2020 and 67.6 per cent in 2021. Internet penetration has also witnessed a huge jump with an increase of more than 45 per cent since 2019. The Bharat 2.0 internet report by Nielsen also suggests that the growth is higher in rural regions compared to the urban centres, which have clocked a growth of 28 per cent.
Could you shed some light on the asset-light business model of Spice Money? How are you leveraging technology, automation of processes and the wave of digital adoption?
Digital adoption is on the rise across various verticals. Talking about the financial ecosystem, digital solutions are complementing traditional banking and helping in driving the financial goal of the country. Asset light models have helped to reimagine businesses by having minimum ownership.
Our technological expertise and asset-light model have helped us in building highly scalable solutions by reducing our processing costs. One of the major reasons behind the minimal penetration of the ATM network across rural regions is cost. ATM machines are investment intensive and the operational & maintenance costs are also high. Operating with an asset-light approach, we decided to bypass the traditional ATM machines and replace them with a hybridised assisted digital approach with the help of our mATM wielding adhikaris. Today, we have successfully established more than one lakh mATMs across the country.
We are onboarding rural nanopreneurs to become a part of our Adhikari network just with the help of a smartphone and internet connection. Our phygital model is highly cost-effective and is enabling us to build the last mile connectivity without having to set up a huge infrastructure in place. Our Spice Money super app is a one-stop destination for all banking and financial needs. With the help of our one million Adhikari networks, covering 18,500 plus pin-codes, we have been spearheading the efforts towards bridging the financial services gap in rural India by providing banking as well as financial services to the remotest corners of the country across 700 districts and 5,000 blocks thereby, revolutionising the way Bharat banks are.
Spice Money grew 80 per cent in its service-fee revenue to Rs 341 crore in FY22 from Rs 190 crore in FY21. The fintech platform’s Adhikari Network nearly doubled to reach 1 million nanopreneurs in FY22. What are the major factors responsible for your superior high-growth performance?
Since its inception, we have witnessed exceptional growth in our business. The outbreak of the pandemic further accelerated this growth as a large number of migrant workers returned to their homes in rural India due to the pandemic-induced lockdown. Through our technological expertise and a strong foothold in rural India, we aimed at solving two major challenges i.e. lack of financial services along with the growing unemployment rate in rural India. We identified the potential for creating entrepreneurship opportunities during the pandemic and launched the zero investment business initiative that removed the barrier of entry for aspiring rural nanopreneurs. The initiative was yet another step towards our efforts to provide financial freedom to the underserved rural population of the country. Post the launch of the initiative, our Adhikari network grew from 3 lakh to 10 lakh today. Spice Money’s Adhikari network covers 95 per cent of rural pin-codes in India and spans across over 18,000 pin codes, 700 districts and 5,000 blocks, serving over 10 crore households. Having local correspondents has helped us in building trust as well as in overcoming language barriers.
In a cash-driven rural economy, our Adhikaris (nanopreneurs) played a crucial role in empowering the rural communities by providing access to essential banking & financial services like an Aadhar-enabled payment system for cash withdrawal, mini ATM, insurance, loans, bill payments, cash collection centre for customer/agents/representative of NBFC/banks, airtime recharge, tours & travel, online shopping, Pan Card, and mPoS services. Leveraging our understanding of rural India, we also launched Travel Union and expanded into the rural travel sector, which has largely been unorganised with no player focussing on the needs of Indians in tier 2 towns & villages. Travel Union addresses multiple unfulfilled needs of its members comprising rural travel agents, small business owners and enterprises with the primary one being the absence of travel-tech platforms designed for rural travel agents at the core. These are some of the key factors that have contributed to our exponential growth.
Could you shed some light on the products/services that you have launched during FY22 as well as new product/service launches in the pipeline for FY23?
At Spice Money, we have been dedicated to solving the problem of access across different sectors in rural India. With our million-strong network of Adhikaris, we have been revolutionising the way Bharat banks are, providing access to the hitherto underbanked & unbanked sections of the rural population. Travel Union, a Spice Money initiative, has been actively providing greater access to travel solutions for rural citizens, democratising travel for millions of rural citizens. We want to further expand our bouquet of services and are creating an ecosystem with a marketplace model with the help of a Phygital Super app. Through this, going forward, we are dedicated to bringing services like healthcare and e-commerce to the doorsteps of the citizens of Bharat.
At the moment, what are your top three strategic priorities?
Rural India has a lot of potentials and tapping that potential is a key focus area for us. Currently, we plan to scale up our existing offerings through our Spice Money super app, along with launching new initiatives based on the success of our pilot programmes across agriculture, insurance, credit, e-commerce, and healthcare. We aim to build India’s largest platform-solving rural access challenges with the best last-mile connectivity, through our open network-assisted digital distribution (ONADD). adhikaris with the presence of over two lakh villages. Meanwhile, our next step is to scale Spice Money Adhikari network multifold, reaching across all villages and block levels in India.
We firmly believe in building human capital which when combined with state-of-the-art technology, can disrupt any space we are in. We have laid the foundation of a strong technology team by strengthening our teams. With empowered and technologically-sound teams, we are well on our way to reaching the goals laid out for our business. We recently reached the mark of 10 lakh