There are 60 million Middle income Indians in India, excluded from the purview of formal banking today. This segment earns Rs. 15K to 50K per month, has limited formal education and owns a smart phone. This segment has aspirations – to earn more, live better and have a financially secure future. We refer to this group as MIDAS – Middle income with Aspirations.
While the banking penetration for MIDAS is estimated to be more than 90%, only 10% have any sort of access to banking products. Given this, the segment largely turns to informal and unreliable options like unregistered chit funds and cooperative institutions for their financial needs. More than a fourth of the cooperative banks have shut down in the last 15 years due to issues with business viability and management competence. Additionally, it is estimated that more than 10 crore families have lost their money to unregistered chit funds. These options have not only proved unreliable but are limited in terms of their offerings.