Vijay Singh is an immigrant worker from Bihar who came to Mumbai three years ago and currently works at a construction site. His family, consisting of his wife and two children, still lives back home with his parents. Initially, Singh would send money through someone who was travelling to his village from Mumbai or via money orders from the local post office. While sending cash, there was always the risk of it getting lost and given his long working hours, getting to the post office in time was not always possible. Needless to say, there used to be several delays in the cash reaching his family and Singh would have to pay 5% as commission charges on top of everything else. But then he noticed his friend Mohan using his mobile to transfer money instantly to his family back home through Vodafone’s mobile wallet service m-pesa.
Thanks to Mohan’s guidance, Singh paid an initial deposit of ₹100 (of which ₹75 went towards activation) and was able to use the service to send money to his father’s account. Now, he regularly heads to the neighbourhood Vodafone recharge outlet and tells the storeowner the amount that needs to be deposited in his father’s account, even topping up his wife’s mobile in the process as well.
m-Pesa was launched by Vodafone and ICICI Bank in February 2014 and has now spread across 85,000 outlets in India, with close to 2.5 million customers. Using an m-pesa account, customers can deposit and withdraw cash from designated outlets, transfer money to any mobile phone in India, remit money to any bank account in India, recharge mobile phones and DTH subscription and clear utility bills. India has about 100 million migrants spread across the country, for whom remittance is a primary financial service requirement, close to 60% of them remit money back home. Only around 60% of the country’s 1.2 billion people are covered by banks.
Even as the prime minister’s Jan Dhan Yojana successfully hit its target of opening 115 million bank accounts to improve financial inclusion, data released by the ministry indicates that only about 28% of the accounts are active, with about ₹9,000 crore deposited. “Opening of bank accounts is not enough by itself. The access points need to be closer to the customers,” says Pramod Saxena, managing director, Oxigen Services. His company, which provides payment and remittance services through digital wa