Financial Services in Rural India-Taking Investments to Rural Pockets through Strategic Tie-Ups Sant T. Guru Research Scholar, Department of Management, Faculty of Social Sciences, Dayalbagh Educational Institute, Agra, India. tgurusant@gmail.com Online published on 12 May, 2017. Abstract In United Kingdom 5% population doesn't have bank accounts and in Australia 7–8% don't have bank accounts, the figure stands for 85% population not having bank accounts in India. Over 700 million people reside in Rural India which inevitably points out on the fact on the low reach of financial services to rural India. This point is taken since for extending financial services to rural India banking infrastructure and sourcing of funds from accounts was required. The question now is why focusing on Rural India? The Indian rural market with its vast size and demand base offers a huge opportunity that banks cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users, 38 per cent of all two-wheeler purchased, for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder. Off lately there have been many innovations in investment products which enable investments to be made with no requirement of bank branches whereby units can be redeemed over ATMs. Also the fact that banks have now worked beyond the normal income generation models and capitalize on their expert of finance to reach the masses for investments as well. The paper focuses on how the strategic tie-ups of banks with FMCG and Telecom companies can tap the investments potential in rural India and make it benefit from their tie-ups. Light is also thrown on certain challenges that need to be countered. Top Keywords Financial inclusion, Banking, Market strategy, Rural India, SWOT analysis. Top |