Business Daily from THE HINDU group of publications
Saturday, Sep 26, 2009
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Business Daily from THE HINDU group of publications Saturday, Sep 26, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Money & Banking
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Interview Western Union to expand rural reach through microfinance cos
Our focus is to ensure that money is transferred conveniently and we see this as the biggest opportunity.— Mr Anil Kapur, MD 
Mr Anil Kapur, MD
Priya Nair Mumbai, Sept. 25 Western Union, one of the world’s biggest money transfer companies, is looking to increase its reach in rural areas by partnering with microfinance institutions. The money transfer company wants to partner with the government to identify and develop the skills that are required in employment destinations across the world. In an interview with Business Line, Mr Anil Kapur, the Managing Director, South and South-East-Asia, Western Union Financial Services, shared his thoughts in this regard. What is the share of Asia Pacific in the total revenue of Western Union worldwide? What is India’s share? Do you see scope for increasing business? Asia Pacific’s share in the corporation’s total revenue is 7 per cent. The big markets are India and Bangladesh. Last year, India saw $52 billion worth inward remittances. During second quarter 2009, Indian operations achieved revenue growth of 11 per cent and transaction growth of 27 per cent. India still continues to be the biggest remittance market, ahead of China, Mexico, and the Philippines. Around 6.6 million people used our service last year, in India. About 60 per cent of the Indian population does not have bank accounts. These people use informal channels and carry cash. That is why the postal department, with its big reach across the country, is our biggest partner. In January 2009, we renewed our agreement with India Post. About 8,500 post offices in India offer Western Union money transfer services. Further, around 20,000 bank branches are offering our services. These banks include State Bank of India, Bank of Baroda, Bank of India, and Canara Bank. In all, we have over 50,000 outlets in India. We also work with other institutions such as e-seva in Andhra Pradesh, in Karnataka with Bangalore One, which is similar to e-seva, and Kerala State Financial Enterprise in Kerala. We are also working with microfinance institutions like Spandana in Andhra Pradesh. We are in dialogue with other Indian MFIs. What changes would you like the Reserve Bank of India to make in the regulations governing the money transfer business? The restrictions — a resident individual cannot receive more than 12 transfers in a year and each transfer should not exceed $2,500 — if possible, should be relaxed or reviewed. Another issue is that this industry is an unrecognised industry. The money that comes into the country through remittance is much higher than Foreign Direct Investment. There should be greater recognition for the remittance industry per se. The Indonesian government provides training to people going abroad. We work closely with the government on this. It will be our endeavour to work on something like this in India. We have had dialogues with the the Ministry of Overseas Indian Affairs. Any plans to expand beyond money transfer to offer personal finance advisory? Our focus is to ensure that money is transferred conveniently and we see this as the biggest opportunity. Western Union’s market share is 17 per cent worldwide. Last year, we moved about $67 billion across the world. We still have huge opportunity to grow in this space. Money transfer continues to be our focus area. We have a long way to go in creating awareness and increasing the number of locations. Within India, which are the States you are focusing on? We are looking at key States in India where the opportunity is huge. We will look at Bihar, Uttar Pradesh, West Bengal, Andhra, and Karnataka. These areas have a lot more opportunity. Traditionally, you have heard of Punjab and Kerala. But migration is also happening from other States. The real focus for us is access, awareness and affordability. We do a lot of consumer awareness programmes with post offices in rural parts of the country. We perform dramas and skits about the usefulness of our service. We do these things in local languages such as Kannada, Tamil andTelugu. We also do similar programmes with banks. More Stories on : Interview | Rural Development | Financial Services
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