Eko: The Mobile Bank for Low Income Customers
Thursday, June 23, 2011
Eko is a low cost mobile banking solution for people in the low income groups. It is just the right service for India, where the workforce is 540 million-strong. Only about six per cent of these workers are employed in the organized sectors. The low cost mobile banking company Eko aims to serve the unorganized segments of our economy.
Eko was founded in 2009 with the aim to reduce the cost of financial transactions. The reason? The bigger banks used to target only higher income group customers due to more earnings from them. Eko decided to reach out to low income group customers through mobile phones to deliver banking services to them.
Almost at the same time a regulation was made by the Reserve Bank of India, which said non-profit companies could only become business correspondents for regular banks, and that retail outlets such as grocery stores and petrol pumps could work as sub-agents of these business correspondents (BCs). These regulations allow SBI and Eko to work together to allow customers to open zero-balance accounts. Customers can save money in these zero-balance bank accounts and earn an interest rate of 2 to 3 per cent per annum on their savings.- all the banking activities such as deposit, withdrawals, remittance and checking balance can be done through SMS.
Low income group customers just have to approach local retail stores that are sub-agents of Eko with their identity proof, a photograph and of course, a personal mobile phone. Eko has managed to reach its target audience easily by collaborating with local retail stores, which are in direct touch with the customers.