Survey: How to Move India’s Small Merchants toward Digital Financial Services
India’s push to expand access to digital banking for small merchants is meeting the headwinds of an economy that still relies heavily on cash. Digital tools promise greater access to credit, more secure payments and less risk, but for micro and small business owners, switching to digital is difficult, as a new survey shows. The results point to several avenues to better serve this important segment.
The Center for Inclusive Growth recently collaborated with IFMR LEAD, a prominent Indian research institute, to conduct a five-city survey of 547 micro business owners in India to understand their needs and the challenges they face in adopting digital transactions.
As the results show, access to mobile phones—the on-ramp to digital transactions—is widespread. More than 80 percent of the small business owners surveyed used a smart-phone and 70 percent had access to internet services. Yet, only about one-fourth of merchants used their phones for financial transactions. Most still rely on cash to transact with customers and suppliers.
Photo courtesy of JanetandPhil.