[Music]
[Applause]
over one third of people in India do not
have access to basic financial services
we ask to be put on do not call or do
not disturb lists so that financial
services companies do not keep harassing
us for loans or insurance services that
we do not want to buy with economic
reform loans and insurance have gotten
cheaper but only for those people that
don’t want it let’s take the case of
Asha my mother-in-law’s maid who spent
her entire life working for them
misfortune struck one day when a biker
hit her and all of a sudden she had a
broken ankle some good Samaritans found
her and took her to the closest hospital
the hospital authorities did a shabby
job they simply bandaged her ankle and
let her breathe through the night in the
morning they suggested surgery the
surgery would cost 75 thousand rupees
that asha did not have so the hospital
discharged her and asked her to be moved
to the closest government hospital the
government hospital authorities did not
get to her till the next day by which
time gangrene had set in and the
suggested amputation of her leg that was
when I got a frantic call asking if
there was any way for her leg to be
saved
we are blessed that we have some great
friends in Pune so we took her to the
closest best orthopedic hospital and at
4 a.m. in the morning some expert
doctors came together to perform surgery
on Nash’s leg and see if there was a way
to save it unfortunately that did not
happen
Asha lost her leg it took three months
after that for the wound to heal so that
we could attach a prosthetic Asha walked
again after nine months during which
time lakhs of rupees had been spent in
an effort to get her to walk again
if Asha had insurance that day it would
have simply been a case of fixing a
broken leg and the entire trauma of Asha
losing her
could have been prevented there are two
reasons why this happens to people
working in the informal sector the first
reason is cash payments and the second
is verbal agreements that are never
documented anywhere lack of proper
documentation and cash payments prevent
any employment history or financial
history from being created that allows a
financial institution to make decisions
about the loan worthiness of a
particular individual lack of access to
capital causes serious imbalance of
power respect and dignity issues for
people that provide us essential
services hence most people do not want
their kids to follow in their footsteps
and working in this sector is not a
career choice but a necessity can you
imagine for a second what would happen
if all of a sudden there were no
babysitters no means no drivers to help
you run your daily life the problem does
not restrict itself to those people that
work in the informal sector in your
household the same problem applies to
people that work in small to medium
businesses as well
the typical small business in India
hires about five to six people and it is
not uncommon for the compound or that
works in the dispensary to be paid in
cash or for the beautician that works in
the beauty parlor to also collect her
monthly salary in cash the household
income of these people is rarely the
issue a driver’s household income could
be anywhere between 40,000 to 50,000
rupees a month and that is because even
if the driver made fifteen thousand his
wife might make another fifteen thousand
and maybe they have a son that works as
a security guard it makes another ten
thousand that’s forty thousand rupees
the problem always is when they require
large sums of money for either care for
somebody that they love maybe the
mothers had an accident and is
hospitalized or maybe the daughter needs
to be married and for that they need
money the source of the borrower is the
problem it’s often the loan shark in the
locality that is giving them this money
at huge interest rates maybe one hundred
and eighty percent a year maybe two
hundred and forty percent a year we tend
to take loans at less than ten percent
the government has done a superb job of
putting together a lot of initiatives to
be able to
right services to them for example the
pradhan mantri Avenue Gena allows for
affordable housing but it has
restrictions on how much money can be
borrowed which is really sad because if
you really take a look at the amount of
money that can be borrowed against
somebody that makes 40,000 to 50,000
rupees a month their creditworthiness
could be as much as 40 to 50 lakh rupees
but yet they are restricted and buying a
house that might be maybe what six lakh
rupees maybe 10 lakh rupees when you
start looking at the differences between
people that work in formal sector and
get calls from financial institutions to
the point of harassment versus people
working in the informal sector that
struggle for small amounts of money
you’ll find that there is a very small
difference and the difference really is
the documentation and the presence of a
balance sheet for somebody working in
operate an employee working for a
company has three very important records
number one an employment contract number
two a salary slip that is accompanied by
a direct deposit in a bank and number
three a credit score by a recognised
credit bureau that establishes him or
her as a responsible borough this
records or these three things put
together establishes the risk associated
with giving that person alone
unfortunately people working in the
informal sector do not have any of these
three they do not have a agreement that
is documented equivalent of an
employment contract they do not have
invoices or receipts that could be the
equivalent of a salary slip and they
definitely do not have any records in a
credit bureau because most of the loans
that they have taken are typically from
individuals or loan sharks and borrowing
money from these and repayment of these
loans do not make that entries into
those credit bureaus as a result they do
not get access to the financial services
that we normally take for granted when
we realize that that was the crux of the
problem we hit upon a very simple idea
if we could mimic those corporate best
practices in the informal sector then
people in the informal sector could be
brought into the financial inclusion
agenda of this country the
infrastructure required to build systems
like these was already starting
to fall in place through the Jan Trinity
the Jonathan yogena account allows
everybody to have a bank account through
which you could make payments digitally
into those accounts number two add her
which is allowed us to establish an
identity for a person and minimize fraud
and the third element is the mobile
phone every household has one there is
at least one digital literate in every
household that means apps can be built
for people that work in the informal
sector to allow for self-service to
happen as well as using the mobile phone
was starting to get cheaper and cheaper
by the day
that was when we decided to start a
company named served that would bring
financial services and eventually
respect dignity and ambition to people
that have been largely invisible and
hence subconsciously ignored by all of
us sir looks at people working in the
informal sector as individual
entrepreneurs and refers to them as
service providers and people that
consume their services as service
consumers so as an example the housewife
in a household context is the service
consumer and the maid is a service
provider similarly in the small to
medium business context the beauty
parlor owner is the service consumer and
the beautician is the service provider
by using terminology such a service
provider and service consumer we level
the playing field and establish the two
parties as business entities that want
to transact business together
the second step in any of such
transactions is the establishment of a
contract or the terms of engagement
which establishes what is one party
going to do in return for what that
contract or those terms of engagement
become the governing framework for
financial transactions that arise from
the business transactions of services
being given to service consumers the
terms of engagement do not have to be
onerous they can be as simple as let’s
say say we were trying to set up a
contract for the driver the terms of
engagement would simply say that the
driver works for eight hours a day six
days a week and gets a salary of fifteen
thousand rupees
in addition we may want to call out
certain perk visits like maybe we
reimburse the school fees for the
drivers kids or we get them clothes or
gifts during Diwali it can be as simple
as that we could also include other
terms like health insurance it is our
belief that we must provide health
insurance to people that work in our
household simply because these are
unspoken expectations from the service
provider in any case even if you did not
agree explicitly to give the driver
health insurance when someone in the
family falls ill the drivers first
choice is to go to the people he works
for with an expectation that they would
pick up the hospital bill this sometimes
as a source of friction between a
service consumer and a service provider
because these types of terms are never
discussed when the engagement begins
once the contract has been established
the system generates invoices for
services provided based on the billing
terms that you have agreed upon so
perhaps on the first of every month and
invoice gets generated by the system
from the driver and sent to the service
consumer the money is then paid
electronically using any of the payment
systems of your choice the service
consumers choice credit card debit card
UPI
net banking but the money always makes
it directly into the bank account of the
particular service provider the system
then generates a receipt and sends it
out to both parties this very simple act
of generating invoices and receipts and
putting the money digitally into the
bank account of the service consumer
changes everything for them when you see
the simple act repeated over time things
change dramatically for the service
provider the direct deposit in the bank
with three pieces of documentation
supporting the transaction an invoice a
receipt and the contract establishes the
legitimacy of the transaction this gives
the bank intelligence into the
financials of the service provider it’s
the beginning of the future balance
sheet that will allow the service
providers to take loans at a reasonable
price
this will also establish an employment
history over time for the service
provider served uses a mobile platform
to allow all these interactions to
happen between the service provider and
the service consumer and help them
secure their future despite the direct
deposits the service providers may not
be eligible for a loan because of a
critical missing record the credit score
the record of current liabilities and
previous loan repayments that
establishes them as responsible
borrowers in a credit bureau to solve
that problem we need to educate about
how credit works
followed by disbursements of small loans
that we help them repay back and start
to build records in the credit bureau
over a period of time loans and
successful repayments of them to
individuals or to loan sharks do nothing
for the borrower’s ability simply
because those repayment do not get
captured in a formal credit bureau the
third part of the equation is preventing
people from the informal sector from
getting caught in that loan spiral
several times the reason for them taking
loans has to do with the health issue
for themselves or someone that they love
in the family this can be avoided by
getting them private health insurance
well there are several government
schemes that offer cheap insurance they
do not always have the best services and
the service providers do not understand
the need for insurance nor do they trust
the government hospitals as we found out
in the case of Asha insurance companies
– do not want to insure people that are
working in the informal sector they do
not find it profitable for three reasons
one they believe that there is too much
fraud in the system number two they have
a question on the ability or the will to
pay premiums and number three there is a
significant belief that people that work
in the informal sector tend to live in
conditions that make them fall ill a lot
more hence the claim ratio is pretty
high we should worry too much about the
premiums because just like corporates we
believe that the service consumers must
pay the premiums for the service
providers it isn’t that best interest to
do so because there is this unset
expectation from
service provider that the service
consumer will take care of them and
their families in times of need as far
as fraud is concerned there is no data
that supports that more fraud exists in
people that work in the informal sector
than people that work in the formal
sector case in point
microfinance it perhaps has the least
rate of defaults compared to other loans
from traditional financial institutions
they know the value of the service
because the service going away means the
reversal in the life ambitions finally
most of the people in the informal
sector tend to work right till the end
because they do not have any retirement
plans or savings they tend to think of
the children as insurance for that old
age which does not always pan out the
way they imagined it to be and that is
where a significant amount of respect
and dignity issues come into play in the
informal sector it is very likely that
we will have a serious shortage of
service staff in a decade from now
unless we make this a choice just like
corporates provide gratuity benefits or
retirement benefits it is incumbent upon
us to enroll service providers in
schemes that secure the golden years it
is heartening for us to see several
not-for-profits and government
initiatives come together to deal with
this problem such as perhaps gift a
pension which is an NGO working towards
that cause I want to sum up my
presentation by acknowledging the winds
of change the government NGOs and social
impact companies are working together
for financial inclusion of the
underserved but it takes two to tango
without participation of people these
initiatives are likely to fail a
contract cannot be created between the
service provider and the service
consumer with interest only from one
party we must rise from what’s in it for
me attitude and giving only at charity
balls charity begins at home change
begins at home
change begins with us change begins with
people around us change begins with
serving the under
served let’s do our bit to bring people
like Asha into the financial inclusion
agenda of this great nation with that
I’m going to sum up my speech thank you
for your time and attention this is
Tarun Sharma signing off from TEDx a
civil
[Applause]
[Music]
[Applause]
over one third of people in India do not
have access to basic financial services
we ask to be put on do not call or do
not disturb lists so that financial
services companies do not keep harassing
us for loans or insurance services that
we do not want to buy with economic
reform loans and insurance have gotten
cheaper but only for those people that
don’t want it let’s take the case of
Asha my mother-in-law’s maid who spent
her entire life working for them
misfortune struck one day when a biker
hit her and all of a sudden she had a
broken ankle some good Samaritans found
her and took her to the closest hospital
the hospital authorities did a shabby
job they simply bandaged her ankle and
let her breathe through the night in the
morning they suggested surgery the
surgery would cost 75 thousand rupees
that asha did not have so the hospital
discharged her and asked her to be moved
to the closest government hospital the
government hospital authorities did not
get to her till the next day by which
time gangrene had set in and the
suggested amputation of her leg that was
when I got a frantic call asking if
there was any way for her leg to be
saved
we are blessed that we have some great
friends in Pune so we took her to the
closest best orthopedic hospital and at
4 a.m. in the morning some expert
doctors came together to perform surgery
on Nash’s leg and see if there was a way
to save it unfortunately that did not
happen
Asha lost her leg it took three months
after that for the wound to heal so that
we could attach a prosthetic Asha walked
again after nine months during which
time lakhs of rupees had been spent in
an effort to get her to walk again
if Asha had insurance that day it would
have simply been a case of fixing a
broken leg and the entire trauma of Asha
losing her
could have been prevented there are two
reasons why this happens to people
working in the informal sector the first
reason is cash payments and the second
is verbal agreements that are never
documented anywhere lack of proper
documentation and cash payments prevent
any employment history or financial
history from being created that allows a
financial institution to make decisions
about the loan worthiness of a
particular individual lack of access to
capital causes serious imbalance of
power respect and dignity issues for
people that provide us essential
services hence most people do not want
their kids to follow in their footsteps
and working in this sector is not a
career choice but a necessity can you
imagine for a second what would happen
if all of a sudden there were no
babysitters no means no drivers to help
you run your daily life the problem does
not restrict itself to those people that
work in the informal sector in your
household the same problem applies to
people that work in small to medium
businesses as well
the typical small business in India
hires about five to six people and it is
not uncommon for the compound or that
works in the dispensary to be paid in
cash or for the beautician that works in
the beauty parlor to also collect her
monthly salary in cash the household
income of these people is rarely the
issue a driver’s household income could
be anywhere between 40,000 to 50,000
rupees a month and that is because even
if the driver made fifteen thousand his
wife might make another fifteen thousand
and maybe they have a son that works as
a security guard it makes another ten
thousand that’s forty thousand rupees
the problem always is when they require
large sums of money for either care for
somebody that they love maybe the
mothers had an accident and is
hospitalized or maybe the daughter needs
to be married and for that they need
money the source of the borrower is the
problem it’s often the loan shark in the
locality that is giving them this money
at huge interest rates maybe one hundred
and eighty percent a year maybe two
hundred and forty percent a year we tend
to take loans at less than ten percent
the government has done a superb job of
putting together a lot of initiatives to
be able to
right services to them for example the
pradhan mantri Avenue Gena allows for
affordable housing but it has
restrictions on how much money can be
borrowed which is really sad because if
you really take a look at the amount of
money that can be borrowed against
somebody that makes 40,000 to 50,000
rupees a month their creditworthiness
could be as much as 40 to 50 lakh rupees
but yet they are restricted and buying a
house that might be maybe what six lakh
rupees maybe 10 lakh rupees when you
start looking at the differences between
people that work in formal sector and
get calls from financial institutions to
the point of harassment versus people
working in the informal sector that
struggle for small amounts of money
you’ll find that there is a very small
difference and the difference really is
the documentation and the presence of a
balance sheet for somebody working in
operate an employee working for a
company has three very important records
number one an employment contract number
two a salary slip that is accompanied by
a direct deposit in a bank and number
three a credit score by a recognised
credit bureau that establishes him or
her as a responsible borough this
records or these three things put
together establishes the risk associated
with giving that person alone
unfortunately people working in the
informal sector do not have any of these
three they do not have a agreement that
is documented equivalent of an
employment contract they do not have
invoices or receipts that could be the
equivalent of a salary slip and they
definitely do not have any records in a
credit bureau because most of the loans
that they have taken are typically from
individuals or loan sharks and borrowing
money from these and repayment of these
loans do not make that entries into
those credit bureaus as a result they do
not get access to the financial services
that we normally take for granted when
we realize that that was the crux of the
problem we hit upon a very simple idea
if we could mimic those corporate best
practices in the informal sector then
people in the informal sector could be
brought into the financial inclusion
agenda of this country the
infrastructure required to build systems
like these was already starting
to fall in place through the Jan Trinity
the Jonathan yogena account allows
everybody to have a bank account through
which you could make payments digitally
into those accounts number two add her
which is allowed us to establish an
identity for a person and minimize fraud
and the third element is the mobile
phone every household has one there is
at least one digital literate in every
household that means apps can be built
for people that work in the informal
sector to allow for self-service to
happen as well as using the mobile phone
was starting to get cheaper and cheaper
by the day
that was when we decided to start a
company named served that would bring
financial services and eventually
respect dignity and ambition to people
that have been largely invisible and
hence subconsciously ignored by all of
us sir looks at people working in the
informal sector as individual
entrepreneurs and refers to them as
service providers and people that
consume their services as service
consumers so as an example the housewife
in a household context is the service
consumer and the maid is a service
provider similarly in the small to
medium business context the beauty
parlor owner is the service consumer and
the beautician is the service provider
by using terminology such a service
provider and service consumer we level
the playing field and establish the two
parties as business entities that want
to transact business together
the second step in any of such
transactions is the establishment of a
contract or the terms of engagement
which establishes what is one party
going to do in return for what that
contract or those terms of engagement
become the governing framework for
financial transactions that arise from
the business transactions of services
being given to service consumers the
terms of engagement do not have to be
onerous they can be as simple as let’s
say say we were trying to set up a
contract for the driver the terms of
engagement would simply say that the
driver works for eight hours a day six
days a week and gets a salary of fifteen
thousand rupees
in addition we may want to call out
certain perk visits like maybe we
reimburse the school fees for the
drivers kids or we get them clothes or
gifts during Diwali it can be as simple
as that we could also include other
terms like health insurance it is our
belief that we must provide health
insurance to people that work in our
household simply because these are
unspoken expectations from the service
provider in any case even if you did not
agree explicitly to give the driver
health insurance when someone in the
family falls ill the drivers first
choice is to go to the people he works
for with an expectation that they would
pick up the hospital bill this sometimes
as a source of friction between a
service consumer and a service provider
because these types of terms are never
discussed when the engagement begins
once the contract has been established
the system generates invoices for
services provided based on the billing
terms that you have agreed upon so
perhaps on the first of every month and
invoice gets generated by the system
from the driver and sent to the service
consumer the money is then paid
electronically using any of the payment
systems of your choice the service
consumers choice credit card debit card
UPI
net banking but the money always makes
it directly into the bank account of the
particular service provider the system
then generates a receipt and sends it
out to both parties this very simple act
of generating invoices and receipts and
putting the money digitally into the
bank account of the service consumer
changes everything for them when you see
the simple act repeated over time things
change dramatically for the service
provider the direct deposit in the bank
with three pieces of documentation
supporting the transaction an invoice a
receipt and the contract establishes the
legitimacy of the transaction this gives
the bank intelligence into the
financials of the service provider it’s
the beginning of the future balance
sheet that will allow the service
providers to take loans at a reasonable
price
this will also establish an employment
history over time for the service
provider served uses a mobile platform
to allow all these interactions to
happen between the service provider and
the service consumer and help them
secure their future despite the direct
deposits the service providers may not
be eligible for a loan because of a
critical missing record the credit score
the record of current liabilities and
previous loan repayments that
establishes them as responsible
borrowers in a credit bureau to solve
that problem we need to educate about
how credit works
followed by disbursements of small loans
that we help them repay back and start
to build records in the credit bureau
over a period of time loans and
successful repayments of them to
individuals or to loan sharks do nothing
for the borrower’s ability simply
because those repayment do not get
captured in a formal credit bureau the
third part of the equation is preventing
people from the informal sector from
getting caught in that loan spiral
several times the reason for them taking
loans has to do with the health issue
for themselves or someone that they love
in the family this can be avoided by
getting them private health insurance
well there are several government
schemes that offer cheap insurance they
do not always have the best services and
the service providers do not understand
the need for insurance nor do they trust
the government hospitals as we found out
in the case of Asha insurance companies
– do not want to insure people that are
working in the informal sector they do
not find it profitable for three reasons
one they believe that there is too much
fraud in the system number two they have
a question on the ability or the will to
pay premiums and number three there is a
significant belief that people that work
in the informal sector tend to live in
conditions that make them fall ill a lot
more hence the claim ratio is pretty
high we should worry too much about the
premiums because just like corporates we
believe that the service consumers must
pay the premiums for the service
providers it isn’t that best interest to
do so because there is this unset
expectation from
service provider that the service
consumer will take care of them and
their families in times of need as far
as fraud is concerned there is no data
that supports that more fraud exists in
people that work in the informal sector
than people that work in the formal
sector case in point
microfinance it perhaps has the least
rate of defaults compared to other loans
from traditional financial institutions
they know the value of the service
because the service going away means the
reversal in the life ambitions finally
most of the people in the informal
sector tend to work right till the end
because they do not have any retirement
plans or savings they tend to think of
the children as insurance for that old
age which does not always pan out the
way they imagined it to be and that is
where a significant amount of respect
and dignity issues come into play in the
informal sector it is very likely that
we will have a serious shortage of
service staff in a decade from now
unless we make this a choice just like
corporates provide gratuity benefits or
retirement benefits it is incumbent upon
us to enroll service providers in
schemes that secure the golden years it
is heartening for us to see several
not-for-profits and government
initiatives come together to deal with
this problem such as perhaps gift a
pension which is an NGO working towards
that cause I want to sum up my
presentation by acknowledging the winds
of change the government NGOs and social
impact companies are working together
for financial inclusion of the
underserved but it takes two to tango
without participation of people these
initiatives are likely to fail a
contract cannot be created between the
service provider and the service
consumer with interest only from one
party we must rise from what’s in it for
me attitude and giving only at charity
balls charity begins at home change
begins at home
change begins with us change begins with
people around us change begins with
serving the under
served let’s do our bit to bring people
like Asha into the financial inclusion
agenda of this great nation with that
I’m going to sum up my speech thank you
for your time and attention this is
Tarun Sharma signing off from TEDx a
civil
[Applause]
[Music]
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