Business Today

The last milers

A few nimble players are furiously delivering financial services to a widely dispersed population and are making money - one customer at a time.

T.V.Mahalingam | Print Edition: August 8, 2010

Manish Khera looks back at his days with ICICI Bank, more than half a decade ago, with just that small touch of nostalgia. Before quitting the country's biggest private bank, Khera used to work with the Major Clients Group of the lender. "The clients were oil and petrochemical majors…. the Navratnas... and a single deal would be worth about Rs 500 crore," recalls Khera of those government-owned clients, while lounging in the 'chill room' of the start-up he heads, FINO.

"But now, with (FINO's) customers, you not just knock off the crores, but also the zeroes," chuckles Khera, 40. The self-deprecatory description of his business can be misleading. Navi Mumbai-headquartered FINO - short for Financial Information Network and Operations Ltd - is the largest so-called banking correspondent in the country.

Some 10,000 bandhus, as FINO's agents are called, in 266 districts across 21 states cover 100,000 villages to reach over 16 million customers - around two-thirds of whom are banking customers and the remaining consumers of insurance and government services.
And by the year-end, FINO's revenues will more than double to Rs 250 crore from Rs 100 crore last year and the number of bandhus will grow to 25,000.


A clutch of small, but fast-growing private players is connecting the proverbial last mile of financial inclusion.


  • Biggest player in the industry
  • Revenues of Rs 100 crore; expects to grow to Rs 250 crore in 2011-12
  • Reaches out to 16 million people
  • Customers include 10 banks and six insurance companies
  • Facilitates NREGS payments of Rs 150 crore per month to
  • fi ve million people in AP, Karnataka, Haryana, Madhya Pradesh and Rajasthan
  • Over 10,000 bandhus across the country

A Little World

  • Over 10,300 outlets in the country, targets 30,000 locations by the end of the year
  • Has 5.7 million customers, plans to touch 10 million by the end of the year
  • Has operations in every state and Union territories
  • Largest customer is SBI
  • NREGS operations in Andhra Pradesh


  • Among the newer players to enter the segment (Feb. 2009)
  • Over 500 outlets (grocers, pharmacies, stationery shops, small cyber cafés, telecom shops, etc.) across Delhi-NCR, four districts of Bihar and one district of Jharkhand
  • Over 70,000 customers transacting between Rs 15 lakh and Rs 20 lakh everyday across 1,500-2,000 transactions
  • Working with the Bihar Government for disbursal of payments to Accredited Social Health Activist (ASHA) workers


  • Software major TCS is working on a pilot project using the banking correspondent model in Gujarat for the Bank of Baroda
  • Venture Infotek, among the country's largest transaction processing companies, plans to enter the segment. Venture Infotek has already provided over 100,000 biometric cards for RSBY in Punjab and Maharashtra, and will be covering around 200,000 BPL households in Gujarat shortly
Not many in corporate India can boast of such growth in either headcount or revenues.

But, then, not many can claim to serve as untapped a market as FINO does and that, too, with little by way of competition. FINO extends its services to the unbanked - there are over 400 million such Indians. Even if it doubles the number of people it reaches out to by the year-end, it would still cover but a fraction of the unbanked population.

FINO is not a bank; it's just a last mile connector. It helps big banks like the State Bank of India (SBI), Punjab National Bank (PNB) and HDFC Bank acquire and service customers who are located far into the hinterland or are too small for most banks to service directly. With a console the size of a brick, FINO'S bandhus facilitate cash withdrawals, deposits, and even loans on behalf of the banks.

Outfits like FINO owe their evolution to a January 2006 decision by the Reserve Bank of India that allowed banks to appoint banking correspondents or agents on its behalf to collect deposits and deliver credit in rural and remote areas. A Little World and Eko India Financial Services are some of the other companies that have come up to connect banks with new unbanked customers.

Industry estimates put the bank accounts serviced by these players at about 18 million. Of these, roughly 11 million are serviced by FINO, the biggest player in the segment, followed by A Little World or ALW with 5.7 million and a million-odd customers by a host of new entrants.

The opportunity has attracted some big names, too: Tata Consultancy Services, India's biggest tech services provider, is said to be working on stealth-mode pilot projects with the likes of Bank of Baroda and PNB using a banking correspondent model.

The business has also attracted others such as transaction processing company Venture Infotek. For the last three years, the Mumbai company has been working on financial inclusion projects across the country, not just providing technology, but connecting the last mile for government projects like the Rashtriya Swasthya Bima Yojna (RSBY), a national health insurance programme for poor households.

Venture Infotek has provided over 100,000 biometric cards for RSBY in four districts of Punjab, as also Maharashtra's Amravati district. Next on its radar are Valsad and Navsari districts in Gujarat, where it plans to cover around 200,000 poor households, says Piyush Khaitan, its Managing Director. The company is also looking at disbursal of funds under the National Rural Employment Guarantee Scheme (NREGS) and related banking transactions.

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