Paytm and Oxigen to help digitize cash transactions in rural India

In a bid to help 26 lakh women's Self Help Groups (SHGs) of India with more than 3 crore members, the rural development ministry is tapping on Paytm and Oxigen Wallet to help digitize cash transactions in rural India.

According to the ET report, "the government wants to rope in digital wallet firms to make Rs 40,000 crore turnover of women’s self-help groups (SHGs) cashless and broaden financial inclusion."

The spokesperson told ET that, the lack of banking facilities in remote rural areas is affecting the transaction transparency in the usage of loans given by banks through SHGs. "Cash management is an issue…We want to create a doorstep facility with the help of these apps so that people do not have to go to a bank in a far-flung area,” he said.

Currently, the loans are mobilized by bank ‘sakhis’ - rural women members of SHGs - who help in connecting borrowers with the banks arranging mortgages and disbursing loans. The ministry wants to expand the reach of these pilot projects to find ways of disbursing wages in areas where banks and ATMs are yet to reach.

“Last-mile connectivity is a big challenge …We are in talks with the department of financial services to
help us try alternatives for ensuring access to money in rural areas,” another official said.

Following the demonetization of Rs 500 and Rs 1000 notes, the ministry has tied up with banks to ease the process of transferring money through welfare schemes. Especially for women beneficiaries, banks have scheduled special time slots to complete the transaction. Apart from this, the ministry is also warning villagers to stay away from “unscrupulous elements” in these times.

“The private sector has shown a lot of enthusiasm for this exercise. Even they were not aware of the huge scope of such activities in rural areas,” a senior government official said.

The government is also experimenting with mobile transfers to beneficiaries of the National Rural Employment Guarantee Scheme in several districts of Rajasthan.