nitin badjatia

voice of the nation
Image by Dipanker Dutta via Flickr

I’ve been clearing out my ‘read later’ queue today, and came across another excellent post by ReadWriteWeb.  This one is on a rural banking innovation Called Cashnxt.  If I remember correctly, the majority of Indians do not have a bank account today (I remember a figure of 70%).  While there are many factors that have kept banking largely an urban activity in India, one critical component is the huge overhead of building, manning and maintaining a massive network of branches across the rural plains.  Cashnxt addresses this dilemma with an ingenious use of mobile phone technology:

Cashnxt: Low-Cost Banking for the Rural Poor – ReadWriteWeb

Mobile Phone Transactions

As a customer, if you and a vendor are a member of the Cashnxt network, you can conduct transactions using your mobile phones. The merchant dials CashNxt’s IVR number, enters their PIN and transaction amount, and then hears a high pitch sound on their mobile phone. The customer does the same – calls the IVR number, enters their PIN and hears a high pitch sound. The two phones are then brought together, held close enough for CashNxt to encrypt and decrypt the sounds. The transaction is then confirmed via SMS.

So, for those of you who haven’t been to India recently, one of the oddities of rural development is that mobile phone technology has often reached villages faster than other modern advancements.

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