Hyperlocal marketing for financial inclusion in India

Financial institutions leveraging hyperlocal marketing can drive holistic growth by empowering individuals, fostering economic development, and extending financial services to underserved populations.

In a country where the population exceeds 1.4 billion, RBI's Financial Inclusion Index 2023 claims only 60.1% have access to essential financial services2. Despite significant technological and economic growth, a considerable portion of the population in the country still lacks access to essential financial services. With nearly 80,000 BFSI companies operating, there is an urgent need to improve the penetration of financial services. 

Today, a large segment of the population, especially the 70% residing in less-developed areas, remains excluded from accessing proper financial services. Many individuals, particularly in tier 2, tier 3, and rural areas, still have not fully embraced the world of banking, loans, and investments.

Financial brands are entering newer markets and aiming to increase their market share by offering affordable and accessible products tailored to local needs. However, traditional marketing methods often fail to effectively reach these markets due to gaps in knowledge, logistics, technology, or customer outreach. 

This gap, this exclusion, presents a challenge that requires attention. But how can we address it effectively?

Hyperlocal marketing goes beyond just proximity; it is also about being relevant. It delves deep into the fabric of local culture, language, and aspirations. In the context of MSMEs, it means understanding the unique challenges and aspirations of entrepreneurs in each region. Targeted marketing strategies can significantly improve financial inclusion. Hyperlocal marketing acts like a powerful spotlight, focusing on specific communities and understanding their unique needs and preferences.

The increasing popularity of "near me" searches, influenced by locals and mobile search trends, emphasizes the need for businesses to understand and target their local audience effectively. These are the areas where hyperlocal marketing steps in. Bridging the gap between businesses and their target audience at the grassroots level, hyperlocal marketing has gained prominence due to its highly localized approach.

Targeted solutions, personalized experiences

Let's face it; a one-size-fits-all approach simply doesn't work in India. Each region, each village, and each community within a district has its own story. Whether it is a textile business in Surat or a manufacturing unit in Ludhiana - they speak different languages, have diverse cultural beliefs, and have varying levels of financial literacy. It is important to tailor marketing strategies to resonate with local sensibilities. Hyperlocal marketing acknowledges this beautiful tapestry and allows BFSI institutions to:

• Speak the language: Think about receiving information about a savings account or loan options in native language, wouldn't that feel more comforting? Hyperlocal marketing ensures authentic message resonates with local dialects and cultural references, building trust and understanding.

• Fostering trust: Wherever exchange of money is involved, trust is a key currency. Businesses and Individuals rely on personal relationships and word-of-mouth referrals. Hyperlocal marketing allows NBFCs and other financial institutions to emulate this trust factor by delivering personalized experiences.

• Design a solution, not just a product: Financial institutions can delve deeper and understand the specific needs of a community. This paves the way for designing products that support the complex MSME ecosystem, address community-specific risks, or even flexible savings schemes catering to irregular income patterns.

• Tap into the power of local heroes: In today’s world, leveraging the power of community leaders, local content creators and partnerships with trusted organizations represent another powerful tool against advertisements. These local faces of communities not only enhance trust but also address local concerns, clarify misconceptions, and encourage participation in financial inclusion initiatives.

• Leverage technology: The increase in internet penetration and smartphone adoption can address many challenges. Hyperlocal marketing can leverage digital channels to reach MSMEs at scale. Whether through targeted social media campaigns or location-based advertising, lenders can establish a formidable presence in tier 2-3 cities and beyond without massive infrastructure investments.

One example of an Indian brand effectively implementing hyperlocal marketing is Swiggy, a popular food delivery platform. Swiggy uses hyperlocal marketing strategies to target specific neighbourhoods or areas with tailored promotions and advertisements. 

For instance, Swiggy sends push notifications to users in a particular locality with offers and discounts from restaurants nearby. Additionally, Swiggy has used hyperlocal campaigns to promote new restaurant partners or special deals exclusive to certain areas, increasing engagement and orders from those regions. This approach has helped Swiggy stay relevant and competitive in the highly dynamic food delivery market in India.

Driving holistic growth

Financial inclusion is more than just statistics. It is about empowering individuals, fostering economic growth, and creating a more equitable society. By embracing hyperlocal marketing strategies, we, as a nation, can bridge the gap and extend the reach of financial services to the underserved population.

Beyond selling financial products, financial institutions have a responsibility to empower MSMEs with knowledge and resources. Hyperlocal marketing provides a platform to educate people and empower them with financial literacy, government schemes, and practices that are best suited for their specific region. And it is herein that data-driven decision-making is crucial for driving meaningful impact at the grassroot level. By analyzing user data and measuring the effectiveness of hyperlocal campaigns, financial institutions can refine their strategies and reach the most underserved communities. This approach not only addresses a global challenge but also unlocks the immense potential of a diverse and vibrant nation like India.

Additionally, by embracing hyperlocal marketing, financial institutions can catalyze growth across every corner of India. Whether it's enabling a small-scale farmer to expand operations or supporting a women-led cooperative in a rural village, the ripple effects of these efforts extend far beyond balance sheets.

This article is penned by Nalin Jain, CMO of Godrej Capital. 

Disclaimer: The article features the opinion of the author and does not necessarily reflect the stance of the publication.