By Samir Shah, Co-Founder & Executive Vice-Chair, Dvara Holdings
Twenty years ago, in 2004, management guru, the late Dr. CK Prahalad, wrote a seminal book titled, “Fortune at the Bottom of the Pyramid”. Its main thesis was that there is a fortune to be made by providing goods and services to the world’s poorest people. Dr. Prahalad argued that businesses needed to re-examine their models, processes, and structures to profit from this vast, untapped market. His vision went beyond mere profit. He emphasized how businesses could simultaneously uplift impoverished communities while serving this market, integrating this vision into India’s strategy for New India@75, released by Niti Aayog before the 75th anniversary of Indian
Independence.
Dr. Prahalad’s book cited case studies from India that demonstrated how companies were profiting from supplying goods and services to the bottom of the pyramid, although such examples were limited at the time. Unfortunately, Dr. Prahalad passed away in 2010. Today, however, we see his vision coming to fruition, driven by a key differentiator: India Stack. India Stack, an ecosystem created by the Indian government, consists of a biometric-enabled identity layer (Aadhar, e-KYC, e-Sign), a payment layer (UPI, Aadhar-enabled payments), and a data layer (Digilocker, Account Aggregator). This ecosystem has revolutionized financial inclusion, enabling interoperability and collaboration through its open APIs and standards.
The benefits of India Stack are often highlighted in two key areas: access to credit for people at the bottom of the pyramid, and digital payments, including Direct Benefit Transfers (DBTs). These have allowed informal micro-enterprises to thrive and integrated more people into the formal economy. But the fintech revolution unleashed by India Stack goes beyond credit and payments. The needs of India’s millions of poor are diverse, and fintech innovations are addressing these comprehensively.
For instance, take Farmer Producer Organizations (FPOs). They provide small farmers with end-to-end services, covering all aspects of cultivation. The Indian government’s 10000 FPO Scheme is an essential enabler for these small and medium farmers, offering critical support in terms of financial and market access. Fintech companies are targeting this sector, utilizing technologies like Remote Sensing, GIS, AI, and ML to provide farm-level analytics and actionable insights and agri credit underwriting tools enabling FPOs and farmers to
successfully navigate the current agricultural landscape and attain better price discovery.
One innovation, for example, is currently connecting over 50,000 farmers through an integrated platform that brings together farmers, FPOs, and agricultural stakeholders. This platform digitizes lands and business activities, providing critical data on crop area and
aggregated demand for inputs at the farmer, village, and FPO levels. This data facilitates better planning, inventory management, and efficient use of credit. The platform also connects farmers with input suppliers, buyers, warehouse linkages, and financial institutions,
as well as offers specific agronomic and weather advice that is tailor-made for them.
Another instance is the dairy sector. Fintech companies are utilizing sophisticated technologies and advanced analytics to provide comprehensive cattle management solutions that address the entire dairy value chain. Beyond improving livestock productivity and welfare, these technologies are also helping in accurately assessing cattle identity for insurance purposes. One such gamechanger is muzzle-based digital identity technology, currently being pioneered, which can significantly aid in assessing cattle identity, health, and productivity. Further examples can be found in the healthcare sector.
From savings and investments to credit and insurance, there is a fortune to be made at the Bottom of the Pyramid. Entrepreneurs behind the fintech revolution are tapping into this fortune with a combination of connectivity, technology, and chutzpah. More importantly, they
are playing a significant role in reducing poverty and unleashing micro and nano entrepreneurship in India.