30 Minute Interview

Serving the rural market

Kislay Kumar, Business Head - Retail, 3i Infotech, spoke to Nivedan Prakash about the company's I-SERV initiatives and the programs undertaken by 3i Infotech for the upliftment of India's rural folk

Kislay Kumar

Could you highlight 3i Infotech's overall corporate strategy and vision for South Asia and some of the new initiatives that you have launched for this geography?

3i Infotech has plans of expanding its reach and foray into new verticals such as retail, manufacturing, infrastructure and utilities. The domestic market accounts for about a third of our revenues. The banking, financial services and insurance sector contribute to about two-thirds of our revenue in India with the remainder coming from verticals such as telecom and e-governance.

We are seeing a lot of traction for our risk management, compliance and insurance products. Recently, State Bank of India implemented our anti-money laundering solution across its group covering over 16,000 branches.

We have also announced an expansion in the Middle East by launching offices in Bahrain and Riyadh taking the regional presence to 15 countries.

We also see substantial potential in the infrastructure sector to offer systems integration services and believe that there is immense potential for document processing in the Indian market that is characterized by large volumes.

Could you also tell us about 3i Infotech's I-SERV initiative in detail?

In December 2008, we announced the launch of I-SERV, a brand for our retail services. Under the I-SERV brand, a comprehensive range of value added services are provided to consumers, specifically to those in the remote rural areas, thereby empowering them to carry out various day-to-day activities and improving their quality of life. We have deployed the technical infrastructure and manpower required to deliver these services that are related to banking, insurance, mobile, education, ticketing, and utilities.

I-SERV, with a wide network across India, offers a comprehensive range of B2C and G2C services. The stores leverage our experience and strengths in the BFSI and telecom services, e-governance and project management domains. We plan to offer these services through 12,500 stores across nine Indian states, including Haryana, Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Goa, Andhra Pradesh, Tamil Nadu and Delhi.

Each I-SERV store, which also houses a training manual in local language, will approximately benefit 300 to 3000 households by offering a bouquet of products and Services. The I-SERV stores are managed by trained operators covering the remotest rural areas in North, South and West India. We will roll out this initiative at such an enormous level aiming to provide affordable value-added services to the end consumers, thereby transforming the consumers' lives at large.

What other initiatives have you taken up to uplift the rural community in India?

The initiatives being taken for the upliftment of rural community include providing educational services like computer education courses, English education courses as well as a number of vocational courses which are aimed towards creating skills as well as in certain cases, employment. The company is also currently giving shape to a number of financial services, which will increase the outreach of organized banking and will provide financial education and access to a large part of the hitherto financially excluded population. This, in itself, will free a large part of the population from usurious interest rates and ingrained malpractices in the rural economy.

Also on the anvil are a number of thoughtful products and services across telecom, insurance and other value-added services space which will address specific rural needs. Therefore, the focus is on understanding the needs of the rural community and working backwards to work out a model to optimally provide the same.

Apart from above, each I-SERV store provides direct employment to at least one person from the community, apart from the people engaged in awareness generation and education regarding our services. As our initiative scales up, there are likely to be many people benefiting in a direct as well as indirect way due to this deep engagement model that we are setting up.

What has been the impact of the global economic meltdown on the BFSI segment here in India?

India is beginning to experience its own version of a credit crunch as banks tighten lending procedures to curb rising delinquencies, particularly in small unsecured personal loans. India's financial system has so far been spared much of the pain of the global subprime crisis because of the relatively smaller size of its banks and their conservative investment focus overseas.

The Indian banking industry was mostly not exposed to the derivative financial products that have caused the financial crisis in the United States. This is because complex financial tools such as securitized securities were only recently introduced and had not caught on.

The principal vulnerability in the system was the amount of financially mobile capital in the system, as seen in the level of international claims on Indian banks. However, a large part of the damage that this entailed has already impacted the economy, given the scale of the outflows involved.