International Finance Corporation is investing $2.7 million as equity in Vortex Engineering, a developer of low-cost automated teller machines.
The investment will help the Chennai-based company expand its network of ATMs across India’s rural and semi-urban areas, where people have limited or no banking services.
Widespread installation of low-cost, easy-to-use ATMs in the rural areas will facilitate cash withdrawal, especially for the zero-balance and ‘no-frills’ account holders.
It will also help people in rural areas access banking services that are otherwise proving difficult because of high cost.
Other countries
“Vortex’s innovative, solar-powered ATMs combine ease of use with rugged design,” IFC, which is a member of the World Bank, said in a press release.
“IFC’s assistance in implementing technology-led banking services would eventually help us take our offerings to other developing countries,” said Mr Vijay Babu, CEO, Vortex. Thanks to a government push to extend banking services, the ATM market in India is expected to grow three-fold over the next three years, with the bulk of machines bound for remote areas. In addition, banks are increasingly focusing on reducing costs by setting up ATMs instead of full-service branches.
Authentication
“The investment will help in taking basic banking and financial inclusion schemes to rural and semi-urban areas in India,” said Mr 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.”
Vortex’s machines have low capital and operational costs and consume significantly less power than conventional machines. Its machines accept soiled notes, unlike other ATMs that can operate only with fresh notes, and also can authenticate customers through fingerprints. The use of solar power also helps in rural markets lacking access to electricity supply, the release said.
Vortex's plant in Chennai has a capacity to manufacture 2,000 ATMs annually and can be expanded to build 10,000 units.