Lara Gilman is a fintech entrepreneur specializing in mobile money solutions. She was a participant in DFS Lab's inaugural bootcamp in 2016 and a winner of one of five competitive DFS Lab grants to further iterate her company Yooz. See more of Lara's writing on Linkedin.
Demonetization in India has been anything but straightforward and the jury is still out on whether the controversial move will prove worthwhile. The global chatter has been mixed, ranging from bold to foolhardy. Bold because demonetization could trigger a much-needed step-change in the long-term exposure to black money (which some have argued could only have been influenced by something dramatic); foolhardy because the risk/reward coefficient seems lopsided. India risks as much as a full percentage point in GDP and most of the black money seems to have found itself back in the system anyway.
The experience on the ground is no less complicated. On the one hand, queues around the block have made the cash experience almost impossible, particularly for those who would feel it most. On the other hand, the painful cash experience is driving the adoption of digital, something that any fintech or financial inclusion enthusiast could find cause to celebrate. Whether or not you support the decision to demonetise, it’s clear this move has given fintech start-ups an unprecedented advantage against cash.
It’s the Modi lift. Wallets, payroll companies, acquirers, gateways and payment bank providers will have all had a pretty epic month as Indians look to digital solutions in the absence of the 500 and 1000 rupee notes. PayTM, an obvious front runner, reported signing up 20 million new customers since Modi’s announcement. Removing a significant amount of grease from the cash economy, the government has created a unique opportunity for fintechs to on-board merchants and customers to services which can not only solve their cash pains, but also address their broader financial needs. The question is, will customers stay engaged once the cash pains aren’t quite so acute?
From the standpoint of the digitisation of cash, the Modi lift will be temporary. Particularly as new 500 rupee notes increase in circulation, Indians will have the option to go back to cash. While fintech providers have this window of opportunity, it will not be a panacea for long-term digital adoption. In fact, with increased attention on digitisation, any security hack or financial loss in the fintech space could have an amplified impact on Indian consumers’ journey toward digital adoption. The biggest challenge of rapid growth is not getting caught off-guard by rapid growth.
For customers to thrive beyond cash, providers must remain focused on creating and reinforcing consistently positive customer experiences. The digital players who could move the needle will be those who remain invested in offering a relevant, reliable, transparent and accessible service. What is clear is that India is poised to make a potentially radical and permanent shift to digital. Whether India can make this shift is, largely, in the hands of the ecosystem players building it.
We’re excited to announce the investees from our first Design Sprint Bootcamp we held in Dar es Salaam, Tanzania back in October. We convened over 20 entrepreneurs from 10 countries working to introduce revolutionary digital financial services to the world’s poorest communities. We were inspired by their commitment to creating transformative products.
Over six days at the bootcamp, the entrepreneurs and startups received hands-on advice, mentorship, and strategic counsel from industry experts. Based on the Sprint methodology, the bootcamp provided the framework for them to address challenges, create and test prototypes, and present refined solutions to fundamentally transform communities and improve living standards through digital financial services. When executed right, digital financial services have the power to completely transform the economies of the poorest, profitably and at scale.
“The bootcamp has given us the space to confront some of the critical challenges that will make or break our idea. Having the opportunity to step out of your day-to-day and do that in a community of people who are experienced, intelligent and willing to work with you on it – invested in you – has been fantastic,” said Lara Gilman from Yooz.
DFS Lab is investing roughly $400,000 of non-dilutive funding between the following four standout ventures:
We look forward to see what these innovative startups will do and are proud to be able to play a part in helping them reach their full potential.
Here are some photos and a video from our week in Dar es Salaam to learn more and meet some of the investees.