Mohammed Riaz, in conversation with Souvik Goswami of Elets News Network (ENN), says the Prime Minister’s Jan Dhan Yojana is the right step in the right direction, though it will be a challenge to make the transition from a cash-oriented economy to a digital economy
Give us an overview of the overall operations of BASIX.
BASIX is a livelihood promotions institution and was established in 1996. We mainly work with the poor and lower sections of the society. We aim to build capacity and capabilities in them through providing access to various kinds of resources and improve their income level. Now comes the basic question: what do we mean when we say ‘livelihood’?
Simply put, it means increase in the income level and reduction of the expenses of the customers. BASIX has been successfully working for many years in developing it along with a profit model. All our business models are profitable and we attract mainstream capital and investment into this business. On the other hand, we also focus on attracting best of the human resources as we feel people are also very important along with capital. We attract the best of the talent to join us in the process of building inclusive India.
Your organisation mainly works in the rural parts of the country. What kind of challenges do you face when it comes to reaching out to the rural masses?
Inefficiency is one of the main problems which comes to my mind when we talk about working in rural areas. But I also think that problem arises mainly from the lack of proper infrastructure and absence of talent. However, like any other business, I think that once the customer understands products and services efficiently, it increases its acceptability and it becomes easy to sell. Be it finance, micro finance, skill training or agri extension advice – it all centres around educating customers…this is our way of working. In our business, we educate our customers by meeting them through various village meetings. Once the customer understands the impact of our work, they become regular users of our various products.
What steps are being taken by your organisation to counter these challenges?
We need to work on rural inefficiencies in terms of distance, productivity or the financial condition of the customers. Keeping in mind all these, we have recruited our staff from the local areas who are working at the grassroots level. This helps us have a better understanding of the entire scenario. Our recruitment strategy is based on this model. On the other hand, we recruit best of the talents in the managerial level. We take people for managerial level with the minimum qualification of an MBA. We do that as we believe that prolonged period of education tends to improve the thinking of a person. We also have a livelihood academy in Hyderabad, where these people are trained. This is how we are working to overcome these challenges. On the other hand, we offer wide range of services to our customers and there lies the challenge of providing those services in a seamless manner.
“Inefficiency is one of the main problems which comes to my mind when we talk about working in rural areas. But I also think that problem arises mainly from the lack of proper infrastructure…”
What kind of services do you provide to your customers?
Our strategy is to provide a comprehensive set of livelihood promotion services which include Financial Inclusion Services (FINS), Agricultural/ Business Development Services (Ag/ BDS) and Institutional Development Services (IDS) to rural poor households under one umbrella. Financial Inclusion Services (FINS) are provided to fulfil working capital and investment needs of the clients – the poor households. It includes savings, credit – short term and long term, insurance for lives and livelihoods, fund transfers, commodity derivatives, financial orchestration – ranging from grants to equity for livelihoods. Agriculture and Business Development Services aim to strengthen the livelihood of the rural poor and women by identifying the sub sectors in which a significant number of people are engaged and institutionalise the services to work on the gaps identified.
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The services include productivity enhancement, mitigating the risks associated, facilitating the Input/Output linkages and value addition to ensure a fair return to the farmer/ customer. Given that the poorest people are isolated and dispersed, it is necessary to organise and strengthen institutions of producers/communities including of the poor and women. This will enable access to livelihood promotion services in a costeffective and integrated manner, directly or by collaborating with agencies that promote livelihood for a large number of people. Institution building thus forms an integral part of the BASIX Design & Strategy.
All these services are being provided by a set of 13 companies under the BASIX group.
The Government of India is giving a huge push to financial inclusion through its Prime Minister’s Jan Dhan Yojana. What is your opinion on that?
It is a right step in the right direction. We welcome the steps taken by the new government. Financial Inclusion is a process. The new government has ensured through their execution mechanism to make banks effectively work in this sector. Banks were nationalised in the past to make an Inclusive India. But that work has not been done as desired. However, today, because of the direction of the government, banks are now trying to do it effectively. I think the challenge will be to encourage the customers to use banks as the medium of their economic activity. In a hugely cash oriented economy like India, challenge will be the transition from cash oriented economy to the digital economy.
How can the challenge of going deep into a country as big as India can be solved?
Only solution to this problem is the more usage of smart technology. We were able to take financial services to the rural India, where there was no electricity, just with the help of smart phones and that too, three years back. Technology can go where even roads can’t reach. But, I don’t agree that technology can deliver on standalone basis. However, technology can reach faster and development can be done along with that. I have been going to rural India since last ten years and I must say that the government has done a tremendous job in connecting rural India. While more needs to be done, we should also focus on leveraging what has been done already.