MUMBAI - Vortex, a young
Chennai-based company, could be adding new energy
to India's rural economic growth with its
award-winning solar-powered automatic teller
machines (ATMs).
Called "Gramateller Indi" ("graamam" means "village"
in Tamil), the low-power consumption machines
operate at one-tenth the cost of conventional
ATMs. State Bank of India, the country's leading
banking chain, has already ordered 300
Gramatellers; 19 other banks are using these
sun-powered cash venders in villages and small
towns.
The immediate demand for the
solar ATMs reflects and empowers India's quietly
surging rural economy, estimated to be worth about
US$450 billion. Rural India, considered the
backbone of the
national economy, is expected
to overtake the urban market in size by 2017.
Mahatma Gandhi's famous
saying that "India lives in villages" is still
strongly relevant, with 70% of the population
resident in rural regions - nearly 30% of India's
more than 930 million telecom subscribers live in
villages. Village residents with bank accounts,
and their numbers are steadily increasing, welcome
not having to travel to a nearby town to withdraw
cash.
India's banking industry has
in recent years identified the potential of the
rural market, but logistics and associated costs
have hindered full-scale expansion. Even so, State
Bank of India more than quadrupled its rural
presence in two years, from 12,000 villages in
2008 to more than 50,000 villages in 2010 [1]. The
Gramateller will help to cut costs by helping
banks set up ATMs instead of full-service branches
in areas where power supply might be erratic or
totally absent.
The Gramateller was a
brainchild of the Indian Institute of Technology
(IIT), Madras (Chennai). Vortex founders Vijay
Babu and Lakshminarayan Kannan, both IIT alumni,
[2] aimed at enabling small towns and villages,
considered unviable banking options, to have a
banking and ATM facility for the first time.
Babu
and Kannan's initial efforts with solar-power ATMs
were greeted with disbelief by bankers. Villagers
folks were also skeptical - until they experienced
how ATMs could help them directly access their
cash.
Less than a decade after they
embarked on what seemed a hare-brained scheme,
Vijay and Kannan found themselves in TIME
magazine's 2011 list of "10 start-ups that will
change your life". [3] They were also among 31
visionary companies selected as Technology
Pioneers 2011 by World Economic Forum, and
finalists of the Wall Street Journal Asia
Innovation Awards in 2010. The Gramateller Indi, which
need only about five hours of good sunshine per
day, use solar panels to convert sun rays into
electrical energy; the electricity is stored in a
battery that runs 24 hours a day. The ATMs can
survive power fluctuations and have power failures
and have a built-in battery back-up for four
hours.
"Solar power for ATMs is
viable only if the ATM consumes less power [than
traditional sources] and does not need
air-conditioning, as is the case with
Gramateller," Vortex founder Babu told Asia Times
Online. "This demand for solar power is different
from that found in developed countries, where it
is wanted more for its non-polluting nature."
A
single Gramateller unit saves more than 90% of the
annual costs of maintaining a conventional ATM,
half of whose annual bill of 144,000 rupees
(US$2,530) goes on air-conditioning, electricity
and generator running costs.
The
solar ATMs can function in temperatures from 0ฐC
to 50ฐC - and without air-conditioning. ATM
security guards may be the only people with a
grievance against the new devices - they can no
longer sit or sleep in ATM cubicles in cool bliss.
Maintenance may not be much of a problem with
solar ATMS, but Babu discovered other problems -
the solar panels require a shadow-free area, and
environmentally healthy local efforts to plant
more trees can get in the way. One particular ATM
location in a village in Punjab had to be moved
several times to escape the shadow of trees
growing nearby.
Babu is convinced
solar-powered ATMs are appropriate across India
and further afield, not least in cities where
extended power rationing is common.
"We
have deployed our solar ATMs in Nepal, Bangladesh
and Dubai," said Babu. "About 20 Gramatellers are
deployed in large cities, the number being
restricted since our main focus so far has been on
semi-urban and rural deployments."
Vortex plans for expanding in
Asia received a boost last month when the
Washington-based World Bank's International
Finance Corporation (IFC) on June 25 announced a
$2.7 million equity investment in Vortex.
"The
investment will help in taking basic banking and
financial inclusion schemes to rural and
semi-urban areas in India," says Thomas Davenport,
IFC Director for South Asia. "Bringing banking
close to home means a lot in a country where less
than one-fifth of over 600,000 villages have a
banking touch-point."
IFC expects the ATM market in
India grow three-fold over the next three years,
with the bulk of machines bound for remote areas.
The Indian government plans to extend banking
services to remote areas, and the rugged solar
ATMs fit the bill.
"Several members of the IFC
team have used Vortex ATMs and the experience is
not very different from using a conventional ATM,"
Davenport said in an e-mail to Asia Times Online.
"The flexibility to work on alternate/renewable
power sources is truly meaningful especially
because many parts of South Asia do not get
traditional power supply. These ATMs work on both
normal power and solar sources."
The
solar ATMs could be the biggest blessing yet to
serve the rural banking industry, which made a net
profit of $347.96 million in 2010-11, and grew
5.5%. Saving bank deposits increased by $2.62
billion in a year, according to the Reserve Bank
of India report "Trend and Progress of Banking in
India 2010-11".
The IFC too sees India's
rural markets growingly significantly in coming
years. "Many of our investments are geared to
facilitate financial inclusion in such markets,"
said Davenport. "This also meshes well with the
intent of the Reserve Bank of India, which is
supporting greater branch outreach and financial
access in rural/semi-urban India."
The
Indian government plans to have a mini-banking
facility in each of India's 600,000 villages, with
an aim of opening about 25 million savings
accounts in villages. [4] Vortex expects to
install about 5,000 solar ATMs in India by 2015,
though the demand for the sunshine-powered cash
venders could be 10 times as much.
Notes: 1. "Growing Interest: Why Banks
Are Reaching Out to Rural India", Wharton
School of the University of Pennsylvania, January
28, 2010. 2. The
Chennai-based Vortex is led by
entrepreneurs and alumni of the Indian Institute
of Technology, Vijay Babu (chief executive), and L
Kannan (chief technology officer). The board of
directors includes Ray Stata (founder chairman,
Analog Devices Inc), Jean-Philippe De Schrevel
(chairman, Oasis Fund), Arun Diaz (management
consultant, formerly head - programme & change
management, Standard Chartered Bank), Anuradha
Ramachandran of Ventureast TeNeT II Fund, Eric
Berkowitz of Bamboo Finance, Noshir Colah of
Aavishkaar Venture Management Services and Mohan
Harshey and Vineet Chadha of Tata Capital
Innovations Fund. 3. "10 Start-Ups That Will Change
Your Life", Time Magazine. 4. "Rural banking gets a big
boost", Rediff, June 20, 2012.
(Copyright 2012 Asia Times
Online (Holdings) Ltd. All rights reserved. Please
contact us about sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
