Traditional Savings vs. Digital Savings

It is ten o’ clock in the morning when I arrive at the K Channasandra bus stand in Bengaluru and start looking for Jayashri’s dairy shop. I take a lane and couple of turns before I find it. Jayashri is standing next to it — at what appears a small tea-stall, and tells me she runs a small tea-selling business on the side. As there are no customers at present she takes me into her dairy shop. The shop is whitewashed in white and green colors. I climb a couple of stone steps and find myself on a narrow verandah with a stone counter top. The shop is clean from the inside but a strong smell of milk lingers on. The counter is connected to the verandah by a low, wooden fence door — latched from the inside. We enter and I sit down on a wooden stool while Jayashri prefers to stand. She leans on the counter, resting her elbows on it as I ask my questions from a distance.

At 42, Jayashri is short, well built and has a wheatish complexion. She is dressed in a sari and her hair is plaited behind her neck. She wears a black bindi on her forehead and a black thread around her neck. She has a deep voice and her eyelids blink rapidly as she speaks with me. All throughout our interview she appears to be restless and speaks to me nervously.

Jayashri tells me she was born and raised in a village near Nagamangala Mandy, a small town near Bengaluru. Her parents were farmers and money was hard to come by. Jayashri got married and came to Bengaluru with her husband — residing here ever since and currently lives with her two children — a daughter aged 21 and son aged 16 — near the K Channasandra bus stand of Bengaluru, in a two-room rented house.

Jayashri had been working as a housekeeper for many years before she came to work in the dairy shop. When I ask her about her husband, I learn she is a widow — her husband was an alcoholic and passed away 12 years ago to a related illness. ‘Being widowed with two children and no one to depend on, I had to learn to manage everything on my own,’ she says.

About six years ago, Jayashri was approached by her sister and brother-in-law. The couple owned this dairy shop and were finding it difficult to manage it owing to her sister’s illness. They asked Jayashri if she would be willing to run it — Jayashri jumped at the chance. Her sister and brother-in-law helped her by lending her the initial capital for the business. She used the money to stock the shop with dairy items and other goods. A few weeks later, she was approached by a popular local distributor and entered into a pact with them to sell their brand of milk. A couple of years back, her sister needed the money she had lent to Jayashri to start up. Jayashri approached a microfinance organisation and took a loan of Rs. 40,000 and paid her sister back.

Jayashri’s typical day starts at 4 in the morning when she receives the distributor’s truck that unloads the day’s stock — milk packets and other dairy items. She cleans and stocks up and is open to customers within half an hour. Jayashri also runs a small tea-stall, making and selling tea right outside her dairy shop. While customers come all through the day, she sees most of them in the morning to buy milk. ‘Overall business suffered a little during the lockdown, but people always need milk!’ she says.

Jayashri’s son and daughter return from school and college by 4 pm and then help her by taking turns to man the shop. She closes the shop at 10 pm every night and I can’t help but wonder how she manages with barely five hours of night sleep!

Jayashri makes a monthly income of Rs. 45,000 from her dairy shop. In certain seasons, she sees more demand for certain dairy items and stocks accordingly. She receives about 3000 litres of milk daily and manages a daily turnover of Rs. 8000. She spends Rs. 12,000 on rent, Rs. 2500 on groceries and Rs. 10,000 on her children’s education fees. She pays Rs. 8,000 monthly in instalments towards a loan she recently borrowed from the microfinance organization. She is left with Rs.10,000 which she deposits in the bank.

Jayashri owns a smartphone which she uses to make calls. She refrains from any online transactions. She owns a bank account and prefers to save in traditional savings schemes such as fixed deposits and post office savings. She has not applied for any government benefit and has no insurance. She started saving Rs. 500 monthly with Kaleidofin since last December. The flexibility to skip payments without inviting a penalty and the promise of an insurance on her savings seemed to appeal to her. During the lockdown, Jayashri was unable to make payments towards her savings but she has now started again. She has also taken up the role of a Kaleido Sagothari to help others in her locality to start saving with Kaleidofin.

Jayashri aspires to expand her business someday, get her children educated and perhaps build her own house. At present, her children’s education takes the top priority. ‘As a single parent I have ensured there is no break in my children’s education. I also want to build my own house, but that can wait,’ she replies. She believes in saving and hopes to meet all her financial goals in the near or distant future.

As I prepare to leave, she agrees to pose for a photograph outside her shop and I see her smile for the first time since I met her.

‍

About the Authors:

Akhil.G is one of the young and bright account managers at Kaleidofin. He manages business operations across southern India and is passionate about working with leading institutional networks to enable goal-based financial solutions/digital payments for over 2 million low-income women entrepreneur-borrowers. He is a classic engineering plus management graduate with a great sense of social responsibility. As an “aspirational district fellow” he has worked on many interesting projects partnering with the Ministry of Home Affairs, Govt. of India. He tweets @akhtlk

Valerie Mendonca is a Senior Research Associate at CIIE.CO, India’s foremost entrepreneurship centre housed at IIM Ahmedabad. Her research interests are women, entrepreneurs, society and storytelling. She tweets @ValerieHood17.

‍

About Bharat Inclusion Initiative (BII):

Bharat Inclusion Initiative (BII) is an incubator platform at CIIE.CO that provides entrepreneurs with the domain knowledge, training, financial support, mentorship, and market access they need to bring inclusive, for profit-business to life. BII’s core design is to promote technology-driven entrepreneurship towards the delivery of affordable services to the “Bharat Segment- the poorest 200 million households in India who survive on less than $5 per person a day” through programs, fellowships, and funding where possible.

The program focuses on solutions leveraging technology, especially the India Stack. It integrates financial inclusion research with entrepreneurship and training to transform these solutions into scalable, viable and high impact businesses. We are keen on partnering with entrepreneurs who are driven by building next-generation digital services for India. Reach out to us at bharatinclusion@ciieindia.org or ask your questions in the comments section below.