gucci outlet Transformation of Rural Finance in In

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ransformation is underway in how rural India finances itself. In many parts, multiple income streams are helping reduce dependence on agriculture. Some individuals are buying vehicles to transport goods and people [link widoczny dla zalogowanych], while others are finding work in government-run infrastructure projects. Banks and finance companies have penetrated deeper into rural India, replacing local moneylenders and finding new business opportunities there.
In rural areas of India compared to the previous year, cash purchases have gone up substantially this year. Earlier, about 15% of the buying population made full cash payments; that is now 25%-30%. The others bring 20%-25% [of the cost of an asset] in cash as their contribution or margin money, and take a short-term loan for the balance. This gives us a good logic of the rural economy. The blueprint and prospect of the economy come from customers' buying patterns, the pressure in paying margin money and their capability to repay loans through installments and the market.
Until 10 years ago, the only source of organized finance was the banking system, the rest were the moneylenders. They gave money to a segment that may not have got any support from the banking system because of their asset base, ability to pay, etc. Rural customers have been well served by moneylenders, whom we call the ATMs of the market -- they give you money even at 12 midnight. There is still a role for moneylenders in this market for certain activities, certain segments and during certain periods. These could be health needs -- a health emergency may occur in the late evening - or weddings in the family. Moneylenders are expensive; interest rates range from 3% to 5% a month. Unfortunately, the rural population has not been cost conscious but it has been very, very cash-flow conscious. They always talk about how much money they need and how much they can repay each month. They have never looked at the cost of acquiring an asset, as their needs are urgent and alternatives are limited. But over a period of time [link widoczny dla zalogowanych], with banking getting more aggressive and little more deep-pocketed through finance and microfinance companies, the dependence on moneylenders for everything has come down.
Two things have resulted in more cash in the hands of rural customers. With gold prices being so high, many people are willing to liquidate some of it and putting it into earning assets like vehicles. They wonder if they will get another opportunity of such high gold prices. The second reason is good support prices for crops [government-guaranteed minimum prices], and crop yields have been good in places like Uttar Pradesh for sugarcane and Madhya Pradesh for soybean. That has left farmers with a decent cash flow.
Besides enjoying higher support prices for crops and more streams of cash flow, people in rural India are also looking to retain their vehicles for fewer years. Tractor ownership used to be for nine or 10 years earlier, but that has reduced to five years. For one, people are able to get better resale prices for their vehicles in the secondhand market. Two, they don't want to overspend on vehicle maintenance. They think it is better to exchange them for newer vehicles. That has increased demand and dealers have now started offering many exchange programs. A lender like Mahindra that is very much present in that market and is also willing to participate in secondhand vehicle financing makes the job easier for sellers to find buyers and also get financial support.
With that, the whole process becomes even more aggressive. All this makes the whole package good for everybody in the system -- the dealer [link widoczny dla zalogowanych], the manufacturer, the financier, the seller of the old vehicle and its buyer. Also, auto manufacturers and dealers see financial institutions as a major support because financing allows them to penetrate that market.
Almost all passenger car makers are today entering rural markets. Cars which was presumed to be only for salaried class, business owners or commercial op