Remittances decline on reverse migration
On the cash out front, Eko sees a huge spike in our Cashout business in smaller villages and cities. Cashout industry has doubled to Rs 10-12,000 crore a year and now increased to Rs 20,000 crore per month in 2021. Airtel Payment Banks, FINO Payments and SpiceMoney are also active on the space
Mumbai Remittances might have come down due to lockdown which has been in force in various parts of the country due to the spread of second wave of Covid-19, still the Cashout has increased at a remarkable level, says a study.
In urban setups like Delhi and Mumbai, Eko, a market leader in remittances, has observed that there has been a higher ratio of reverse migration.
Migration of labour is continuing unabated. According to the data provided by Western Railways (for the period of 01-12 April), almost 4.32 lakh people have returned to the states like UP, WB, Bihar, Assam and Odisha from Maharashtra. Of 4.32 lakh, around 3.23 lakh reverse migrated to UP and Bihar alone. From Central Railways, Ecowrap estimate indicates that around 4.7 lakh reverse migrated to northern and eastern states from Maharashtra.
As soon as the government announces night curfew, it increases the awareness amongst the population that the spread of virus is high and to be cautious with the second wave of Covid-19.
"There have been instances when certain entrepreneurs wouldn't want to service their customers for a certain period of time or even if the entrepreneurs wish to offer services, the customers might not feel free to avail respective services," Anubhav Sinha told Bizz Buzz. "The night curfews have had an impact on remittances. In fact, remittances have come down to 10 to 12 per cent," says Anubhav had started Eko India along with Abhishek in 2007.
The industry had recovered to 80 to 90 per cent of remittances happening during pre-Covid days. However, Eko India observed a decline in remittances only in Delhi and Mumbai.
On the Cashout front, Eko saw a huge spike in our Cashout business in smaller villages and cities. Cashout industry has doubled to Rs 10-12,000 crore a year and now increased to Rs 20,000 crore per month in 2021. Airtel Payment Banks, FINO Payments and SpiceMoney are also active on the space.
In terms of sustenance of business on a long-term basis, Eko aims at supporting both entrepreneurs and customers as well. The brand also sees a bright future in Cashout businesses in smaller centres. It looks forward to expanding its business in smaller cities and towns, ensuring easy accessibility to end customers.
In terms of remittances and Cashouts, leading payment companies have partnered with banks to offer services in their neighbourhood. With the rapid growth of AePS and more connected systems backed by aadhaar, money transfer is a fast-growing space, Anubhav said. As per Eko's data, the brand has been able to capture the market of 3,00,000 entrepreneurs in the country. The app offers entrepreneurs the capability of creating a network for themselves and start servicing customers. There are two primary capabilities which are offered to small businesses who partner with Eko. They include ability to provide remittances to their walk-in customers and Cashout services. The firm provides retail partners an opportunity to convert their own shop into an efficient financial institution. Since the outbreak of Covid, Eko has been playing a critical role as the pandemic has disrupted the livelihood of the migrants.
Since the lockdown was announced, entrepreneurs weren't able to service customers. The industry was basically a business correspondent industry and anybody providing banking services got classified into essential services.