In the heart of Madhuravoyal on the outskirts of Chennai, a man in his mid-40s unfolds a captivating narrative through his recollections. He shares how deeply ingrained cultural traditions have shaped his financial decisions, offering a mere glimpse into the profound influence of digital payments’ journey into peri-urban India — a journey that holds the potential to empower millions.
Peri-urban areas combine the economic traits of rural areas with the accessibility and infrastructure of urban centres. These zones have emerged as dynamic spaces open to embracing technology in their daily lives. Tamil Nadu, the most urbanised state in India, provides an insightful backdrop, with over 50% of its expanse already transformed into urban domains, an evolution projected to reach 60% by 2030.
As urbanisation peaks, growth of peri-urban areas becomes an indispensable facet of this narrative, fuelling a demand for digital financial solutions. With a significant 60% labour force participation rate, predominantly comprising individuals migrating from rural regions, the need for accessible and convenient payment methods has become more urgent than ever.
Distinctive challenges
Peri-urban people, especially women, enjoy certain advantages over their rural counterparts as they typically have greater access to internet, bank accounts, and smart phones. This enhanced access, however, doesn’t necessarily translate into financial empowerment.
Despite having access to these digital tools, peri-urban women often lack ownership and agency over their bank accounts. Accounts are often opened in the name of male family heads, curbing women’s financial independence. Privacy concerns lead women to hesitate sharing personal data for digital accounts. It is imperative to understand that empowerment demands more than just infrastructure; it requires addressing cultural norms and privacy issues, ensuring women’s trust and participation in digital finance.
Comparatively, urban women tend to have almost triple the rate of financial literacy levels and more control over their financial decisions when compared to their peri-urban counterparts. This disparity highlights the need for tailored financial education and empowerment programme in peri-urban areas.
In these peri-urban expanses, the “network effect” takes centre stage, demonstrating the potency of community and influence. Extensive research in behavioural economics highlights how people are more inclined to adopt new products when they witness their peers embracing them. Surprisingly, this influence surpasses the appeal of discounts and rewards, with over 70% of respondents from peri-urban areas expressing a preference for handholding over discounts.
A prime example of effective handholding is seen in the success of banking correspondents who ensure the operationalisation of direct benefit transfers like old age pension. Conversations with individuals reveal a fascinating pattern: they have been guided by friends from SHGs, neighbours or peers to navigate platforms like G-Pay and Paytm. It’s a collective journey of discovery, fuelled by trust in those around them.
Recognising cultural nuances
The blend of tradition and technology in peri-urban India symbolises resilience and progress, highlighting the need for inclusive growth guided by cultural sensitivity. Encouraging a mindset shift and ensuring digital literacy are pivotal. Community-led programmes, public-private partnerships and user-friendly models like M-Pesa can facilitate this transition. Technology alone isn’t enough, a holistic approach emphasising cultural comprehension and collaborative endeavours is the key. This convergence promises financial inclusivity, gender parity and sustainable advancement, fostering a harmonious coexistence of tradition and technology for prosperity in peri-urban India.