Rural India in the Vortex of change

The Corporate
Majority of people in developing countries live in semi-urban and rural areas, where banking access is still limited. Though the concept of personal banking has undergone major transformation with the introduction of Core Banking and Automated Teller Machines (ATMs), the impact in non-urban locations has been limited. Vortex Engineering Pvt Ltd, a company headquartered at Chennai, aims to address this gap by providing ATMs and associated technologies for the rural/semi-urban areas. The products and solutions are specially designed to suit conditions unique to this segment erratic power supply, tough working environment, lesser literacy levels of end users, etc. Vortex is the pioneer and leading provider of innovative low power consuming ATMs specially designed for this segment. Built on years of R & D in collaboration with IIT Madras, with a focus on rural needs, Vortex is now changing the face of banking with its Gramateller ATMs. The company has been selected as one among the 10 start-ups that will change your life by TIME magazine, is one among 31 visionary companies selected as Technology Pioneers 2011 by World Economic Forum, and was a finalist of the Wall Street Journal Asia Innovation Awards 2010.

Enabling rural banking

Less than 20% of rural households in India have access to formal credit mechanisms. Equally low are the numbers of people in both rural and semi-urban India who hold simple bank accounts. The vast majority are at the mercy of greedy local money lenders. Inclusive Banking would be key to bringing them into organized and formal systems. Banks and MFIs have been hampered by the high cost of delivery in servicing remote far-flung areas. Since saving sizes are small and the number of transactions per day even lower, it becomes unviable for banks to penetrate such areas by having branches. Even credit delivery through ATMs becomes a costly proposition due to its high capital costs. Currently India has an ATM penetration of about 0.04 per 1,000 people. ATMs in rural India can really help villagers to take out money at appropriate time. Otherwise they have to cover a long distance to the nearby banks during office hours to withdraw money. With the mission of helping banks reach out profitably to unbanked & under-banked regions, and years of R & D ably supported by IIT Madras, Vortex has designed ATMs which are highly reliable, rugged, easy to use and eco-friendly. The Gramateller, which has been granted five patents, is making waves in India. It scores over conventional ATMs in terms of power consumption, ability to handle wide variations in quality of notes, biometric authentication as an alternative option to PIN, ability to function without the need for airconditioning and runs on the Linux operating system. The capital cost of Vortex ATM is less than 1/8th of a conventional ATM, dropping and they consume up to 90% lesser power and hence can be economically operated using solar power. This drops transactions rates to less than 40 per day and therefore making it viable for financial institutions to focus on inclusiveness.

Vortex ATMs are currently serving even the remotest parts of rural India using technology as an enabler to improve quality of life. Its innovative ATM portfolio comprises Gramateller Indi ATM, Gramateller Duo ATM, and solar power options for both these models. Mature markets, on average, have a cash dispenser for every 1000 people. By this standard, India has potential for about a million ATMs as compared to the 20-25,000 in existence today. This is not counting the potential this offers to MFIs to increase their access points. The trickle down impact would be enormous Vortex's end goal is to have one ATM in each village in India. That's 650,000 ATMs, Even that won't be enough to put India on par with other countries. The U.S. and Europe have one ATM per 1,000 people. By the same yardstick, India needs one million ATMs. But for now, Vortex has set its sights on rural India where it believes financial access can have the most impact.

Questions for discussion

1. 2. 3. 4. Which pillar of Rise does the story align with? What are the identifiable qualities that align the story to your chosen pillar? What is your take-away from the story? How will you use it in your life and what impact do you expect?