Sub-K iTransactions

Abstract

In 2010, Sub-K iTransactions, a business correspondent start-up, implemented a pilot project on dairy payments with village cooperatives of Gujarat Cooperative Milk Marketing Federation. The company sought to migrate cooperatives' payments to farmers, such as revenues from milk or net services provided -- like agricultural inputs and veterinary care -- from cash to an electronic payment platform, with a view to providing cash access points at convenient locations, promoting financial inclusion among farmers, and reducing the costs associated with cooperatives' cash payments. Sub-K's business correspondent network promised cooperatives enhanced value by lowering the risks and costs of cash: agent fees, transit and fraud risks, audit costs, and the cost of financing cash balances. Dairy farmers, on the other hand, would receive savings accounts with all the attendant benefits: indefinite retention of balances, savings, and the opportunity to build a credit history. In addition, they would have exact payments credited directly into their accounts without rounding-offs.