PayNearby is India’s largest hyperlocal fintech startup. In its very first ‘India Savings Behaviour’ report it stated that over 80% of Indians today have a bank account, but still a massive percentage of people mainly low-income group still resort to informal arrangements such as chit funds and cash under mattress to keep their savings saved. Major reasons behind this are lack of awareness, uneasiness towards technology and mainly accessibility challenges of formal financial systems.
The trend is mainly observed in urban interiors and rural India. According to the survey conducted it states that 47% revealed that they have no restrictions on the amount to be saved. 65% people stated that they try to avoid formal saving methods because they are unable to meet regular cash flows and due to large household expense they can’t commit for a fixed savings amount.
35% of the respondents revealed that their primary objective when saving is to stop themselves and the household from making unnecessary expenses. 65% reveal that mostly they end using this savings money that they create from surplus in fulfilling their short and medium term life goals which varies significantly from gender and age groups. 49% of the respondents prefer keeping a safety amount aside in case of emergency. More than 40% of the respondents primarily of low-income group avoid a formal saving due to fear of documentation and processes. They are hesitant in accepting this approach.43% of consumers said that the ease of operational process is an important factor that determines whether and how often they will put money into a savings fund.
Mr. Anand Kumar Bajaj, MD & CEO, PayNearby, said that the main lesson that they got from the pandemic is the need to invest in health and economic infrastructure. It helps us to stay prepared and cautious to face such a crisis situation. Apart from the government and civic bodies it is very important for every individual to do their bit. Savings is another important factor to ensure economic security.
A major part of Bharat today is putting tremendous efforts make both ends meet. Digital Pradhans, spread across 17,000 PIN codes are doing tremendous job of enabling DBT fund access of more than Rs. 6,000 crores. This is possible because of NPCI’s support, guidance from RBI, policy directions from DFS and Finance Ministry and most importantly, the Banks who host these millions of accounts and our sponsor banks.
The study reveals the importance to simplify savings product offerings, so that it can be easily accessible. The Digital Pradhans have a strong social contract in the catchment areas. It is very important to build trust and a relationship with the local retailer so that one can work closely with the banking partners to enable easy consumption of goal based savings products in a secure and friendly way.