Will Airtel Money and Sahaj's tie-up fulfill India's financial inclusion dream?

Three districts of Uttar Pradesh – Juanpur, Varanasi and Gorakhpur are in the process of being offered a banking facility. This move comes with the announcement of Airtel M Commerce Services Limited (AMSL), a subsidiary of Bharti Airtel recently entering into partnership with Sahaj e-Village Limited.

Sahaj eVillage Ltd, a Srei Venture Initiative, is a business integrator in the field of IT infrastructure with a focus on rural India. It has over 99 offices across 6 states and has emerged as one of the largest implementers of ICT-based projects in India. More than 28,000 Common Service Centres (CSC) across 107 districts in the states of Bihar, Assam, Tamil Nadu, Odisha, West Bengal and Uttar Pradesh are set to be launched by Sahaj.

Sahaj claims that it will offer customers an ‘Airtel Money Super Account’, which allows financial transactions such as money transfer, cash deposit, and cash withdrawal. The account gives an interest of 4%. The Airtel Money linkage also claims to allow remittance from one Airtel mWallet to another, and the transfer of money from the bank account. Non-Airtel customers can receive money on their phones which can be converted to cash. This can be done via an existing Airtel Money Axis Bank customer service point in the state, or through one of these Sahaj Jan Seva Kendras, operated by Sahaj eVillage.

In India, a significant population of mobile subscribers in rural areas do not have access to banking facilities. Inclusion via mobile mode is the future, considering the fact that mobile connectivity has reached the deepest pockets of Rural India. This is a giant step by Sahaj in taking the benefits of financial inclusion through m-commerce to the large population of rural citizens in Uttar Pradesh we serve through our huge network of over 8,000 centers. This is yet another step at bridging the gap between rural & urban markets. says Mr. Umesh Rao, President, Sales & Marketing, Sahaj e-Village Ltd.

Sahaj, claimed to have over 550 business correspondents in Uttar Pradesh in arrangement with various banks so it is not a first for them. What differentiates its partnership with Airtel is the ability to transfer money from the phone.

LTP View: Only 54.4% of rural households had access to banking services as per 2011 census. With more than 700 Mn subscribers (according to Gartner) of mobile telephony in India, the market potential for such a service is significant. Sahaj’s large network of CSCs together with Airtel could help improve financial inclusion of unbanked and underbanked citizens in rural India.