Capturing the Rural Markets

What financial products and services are offered in rural and semi-urban communities?

Mahindra Finance began as a captive financier of Mahindra Utility Vehicles in the early 90s. Over the years we have diversified into a financial services provider with a whole suite of financial solutions tailored to the under-served customer in under-penetrated rural markets. Our product portfolio consists of vehicle finance, which includes financing of passenger vehicles, utility vehicles, tractors, commercial vehicles, construction equipment; and pre- owned vehicles. We also provide SME finance, which includes project finance, equipment finance, working capital finance and bill discounting services to SMEs.

We are also into mutual fund distribution, fixed deposits and personal loans in our target markets. Our mutual fund schemes have Hindi names, so that investors in rural areas understand the objectives of the schemes better. Through Mahindra Insurance Brokers Limited (MIBL), we provide life and non-life insurance products through tie-ups with various leading insurance companies. And, through Mahindra Rural Housing Finance; we provide loans for home construction, extension, purchase and improvement to customers in rural and semi-urban India.

What kind of communications have worked to get financial services uptick in rural areas?

We engage with customers at a very personal level. The cornerstone of our continued growth over the years has been our ability and commitment to have a deep local connect with markets, customers and their changing aspirations. We have ‘locally recruited’ teams on-ground, in constant touch with customers in every corner of the country. Our focus on a customised and value-based approach, augments our goodwill quotient, which is echoed in sizeable repeat and referral business opportunities from existing and past customers. Additionally, our continuous engagement with business partners and other stakeholders enables us to grow sustainably, helping us strategically develop new businesses spread across multiple locations.

What’s your learning and insight in rural and semi-urban areas?

As the leading financial services provider in rural India, we have witnessed an unprecedented change in the Indian heartlands, both socially and economically. Improved communications – especially, mobile and Internet, reduced transportation costs, changing trade patterns for commodities and the emergence of important non-farm activities in rural regions – have combined to present rural India with a new set of challenges as well as opportunities. Traditional farming communities are increasingly complementing their activities with off-farm employment.

Secondly, while India’s traditional rural economy thrived on its local catchment area, it was also constrained by the same – limiting their customer base, their access to ideas, products and innovations from elsewhere. Exposure to the global environment with improved communications is further fuelling rural aspirations and changing the business landscape. Organized operations are gaining momentum and are being increasingly accepted and adopted, especially by younger rural Indians. These fundamental shifts are making Mahindra Finance’s offering more relevant than ever and help us in all our lines of business.

What role is technology playing in enabling on-boarding of customers in your target markets?

We look at technology as a key enabler which plays a crucial role in improving productivity, reaching a broader audience and delivering better customer experience. Over the years we have accumulated unprecedented knowledge and insights about customers in rural India, based on key data points ranging from income, payment behaviours, to socio-economic trends and aspirations. Such data backed by powerful analytics has enabled us to further scale and digitize the business model to drive customer engagement and design solutions customised to the needs of this unique set. As we continue to expand our geographic reach and scale of operations, we continue to develop our technology architecture with new age technologies such as Blockchain, Artificial intelligence and machine learning to support this growth.

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