India took over from the United States as the second-biggest Internet user earlier in June.
This is great news as many proactive changes are happening in the technology sector on the social front led by the government.
We here at Rang De are a living example of the power of technology.
We lower the cost of loans by crowdsourcing over the internet. There are many crowdsourcing platforms out there but Rang De is one of the best examples of applying that idea to the problem of poverty.
We are excited about the future as the stage has been set for various actors to leverage on recent developments to radically increase financial inclusion.
Firstly, regulations are expected to be formulated to better manage the peer-to-peer lending boom. The Reserve Bank of India is open towards new kind of banks which are targeted towards the lower income community with the aim of financial inclusion such as payment banks and small finance banks.
Parallel to this is the Prime Minister’s JAM trinity (Jan Dhan Yojna, Aadhar and mobile phone accessibility). Moreover, the India stack — a set of technologies which have been created to enable this financial inclusion front — will revolutionise this space.
Let’s talk about three of the India Stack APIs that we are especially excited about.
Aadhar-enabled authentication can help make the loan application and disbursement process completely paperless.
Today, if you really want to validate or get documents i.e. ensure that the fund recipient is real, then you have to fill a KYC (Know Your Client) form. It’s all paper-based and cumbersome but with Aadhar e-KYC, all we potentially need is a tablet with iris scanning support. You can even use a phone that scans the iris and links your Aadhar identifier completing a two-factor authentication process.
The second API that I find interesting is the eSign or electronic signature, again backed by the Aadhar platform. Right now, if anyone wants to digitally sign a document either they have to do it physically and scan it or use digital signature USB dongles. With Aadhar-based electronic signatures, one can do signatures online.
Imagine the day when one can finalise a rent agreement by signing it online and sending it across.
The third interesting development has been the conception of payment banks. There have been talks about the creation of a UPI — a unified payment interface. What it will enable is the sending of any amount to anybody through the use of mobile phones.
Let’s say I want to send money to you. Right now, I would need your account number. I would need to know your IFSC code or add you as a payee.
Under UPI, we will all get an identifier or an email ID that will allow us to receive or transfer money instantaneously.
That can be a very helpful innovation as that can allow organisations to transfer money to the people in need directly and not through any intermediaries.
Also, remittances can be much more easier for migrant workers and labourers who operate far away from their hometowns.
Here at Rang De, we are paying close attention to such developments. We hope to enable our field partners who operate in the field to disburse Rang De loans to work without any paperwork as everything can be digitised. Even money transfers can be cashless and through UPI on mobile phones.
The savings in cost and time is enormous.
Of course, there will be challenges.
We are aware that there are still a lot of areas not covered by internet and telecommunication networks. There are villages with electricity for only two hours in a day. One way we hope to tackle this is through the creation of offline capable data collection apps. These applications can work offline — they don’t need to connect to the internet. But when social workers come back to their head office, these applications can sync and upload the data.
Awareness will be equally important. Rural Indians have limited awareness and limited computer proficiency. We need to train development oriented organisations on how to use these technologies for their benefit.
Luckily, mobile phones are getting increasing acceptance. Even toddlers are comfortable with mobile phones these days.
Mobile phones lower the barrier for access to technology.
Another problem we anticipate is a certain apprehension towards change. Most people are used to dealing with documents and having money in their hands. Such paperless and cashless systems might seem suspicious.
We hope the convenience of such new systems and the savings in costs and time will convince them. Right now, if somebody has to submit a form, they need to take a photograph and make xerox copies of many documents.
It costs people in need some amount of money to actually apply for financial assistance!
But what will be a critical problem will be bandwidth. We need more tech talent to actually work on these problems and solutions.
Rang De is aggressively recruiting programmers and developers and we fully expect to grow our operations in the future.
What we must not forget, though, is that all these technology can allow us — and it’s quite amazing — to become completely paperless and cashless and much more effective and faster at tackling poverty and other social ills.
The problem of poverty in India is one of scale and no human system will be able to successfully tackle it.
We are really looking forward to these developments in the future that can truly help us work at scale.
Aroj George is the Chief Technology Officer and a former ThoughtWorks employee. To reach out to him to know more about how the technology team works at Rang De, do write to email@example.com.
See our Tech Careers page for listing of various positions available at Rang De.