On November 8th, the Indian government surprised their country and the world by declaring their most heavily used banknotes, Rs. 500 and Rs. 1000, invalid with immediate effect. The goal of this policy was to fight bribery and corruption. Though new Rs. 500 and Rs. 2000 notes will be issued over time, people who had the old notes were required to exchange and/or deposit them in their bank account as quickly as possible before they were declared worthless by the state. This shift, in a heavily cash-dependent economy, has generated responses varying from largely positive support to confusion and hostility.
It’s been over a month now, and the narratives still write themselves. Some conversations focus on the big picture, and how the change will be difficult but will benefit everyone in the long term. There are stories of business owners who took the time, months ago, to ensure all their staff had bank accounts and were familiar with cashless living. Then there are others, like our customers, living in rural areas. Farmers who walk miles in search of money to pay for fertilizer and seeds in cash so they can till their fields. Those who trade in goods and cash every day. Very different stories, but they do show that people in rural areas who lack bank accounts are paying a price.
As a company that works with rural customers, demonetization directly impacts the very people whose lives we strive to improve. The multiple MFIs we work with reach out into communities and help finance a variety of products like our clean cookstoves. These products improve lives, and the financing they receive from MFIs helps make them more affordable for rural purchasers, many of whom lack bank accounts and repay their loans in cash.
With the current lack of physical currency notes, many of our MFI partners have tried to help by extending the flexibility in repayments. That got us thinking about what we could do during this period of change. When we work with different partners, we help provide training assistance and marketing collateral on the ground. Could we use our existing literature differently, and our platform as a business to convey parallel messages about how to work with cashless transactions? Or talk about the importance of bank accounts and the different kinds of accounts available to people?
There are logistical concerns as well. Even as we talk digital economy, we must realize that many Indian villages are miles from easy access to markets, and outside the coverage of cellphone towers. In those scenarios, what options might villagers have when they must provide money for goods and services? Could we provide checklists for communities to plan trips to the city in advance as a group, or budget worksheets that might educate and help them plan when they might need to reach out for paper money? These are easily created and disseminated as add-ons to our existing literature, with the consent of our partners.
We don’t necessarily have the answers. What we do have are the relationship with our customers to listen to their needs and ideas that might prove helpful in a time when it is easier to criticize a policy decision. We plan on working with our partners to see how we might, together, take steps forward, reach out a helping hand and talk of successes in the field.