How Eko went the extra mile to reach migrant workers during the lockdown

The Covid-19-induced lockdown brought a host of problems for migrant workers, many of which centred on their financial condition. To ease their pain, fintech start-up Eko Financial Services sought to help migrant workers access their cash wherever they were.

The company, which dispenses basic banking services such as ‘cash in, cash out’ transactions, bill payments, and remittances to low/middle-income groups through its network of retailers via an app, flipped its model around during the lockdown and the mass exodus of migrant workers. Instead of the workers walking into a retail outlet to avail Eko’s services, the platform was brought to them.

“Let’s say there was a customer who lived in Gurugram, and had now started to walk back to Agra. If the customer needed to access cash, ie, wanted cash out services, the customer could reach out to our call centres and tell us where he was. And then, rather than the customer going to the retail outlets, we were requesting the closest retailer to go to the customer and lend a helping hand,” said Abhinav Sinha, co-founder, Eko Financial Services.

This move came to the aid of many of Eko’s migrant customers, like Arun. “During the lockdown, all ATMs were running out of cash. In such a situation, I am very grateful to one of Eko’s merchants who helped me to withdraw cash, ensuring a quick and simple process. The company also provided cash pick-up service, which was of great help,” said Arun.

Eko also went one step further to help its migrant customers, by partnering with Kaushalya Foundation and Smile For All to distribute 5 kg of grains each to the workers.

Banking services made accessible

Eko was started in 2007 by Abhishek and Abhinav Sinha, who had previously worked in the telecom software industry. “We wanted to marry the mobile phone and retail outlet and explore the possibility of building a ubiquitous network of banking transactions and enable many Indians – especially low/moderate-income groups – to get themselves a bank account and start basic banking services,” Abhinav said.

“When we first started, we coloured all our customers with the same brush. But over time we realised that this migrant worker category is slightly more nuanced than the low/middle-income customers. Migrant workers have a huge need to send money back home. These remittances continue to be our largest portfolio,” said Abhinav.

How do these remittances work? A customer can walk into any store working with Eko, explained Abhinav, and provide his basic information and the details of the bank account into which the money is to be remitted. The retailers can then use the Eko-enabled app to transfer the amount as needed.

“On the receiving side, let’s say I send my money to my wife, she can go to a bank branch or ATM to take the money out. Or, if there is an Eko store nearby, she can go to the retail outlet and using the Aadhar-enabled payment system, she can debit her bank account and withdraw the money from the retailer,” he added.

“Initially, we noticed that people would send the money to a friend (who had a bank account) and he would deliver the money back home. But over time the Jan Dhan accounts flourished; there are a lot of people now who have bank accounts,” Abhinav further added.

Eko’s yearly transaction value now stands at $3.5-4 billion, he said. For every transaction made, there is a nominal fee, which is incurred either by the customer or by the bank concerned, which is then split between the retail partner and Eko.

Lockdown woes

The Covid-19-induced lockdown hit Eko’s services particularly hard. “When the lockdown was announced, many of our retail partners did not qualify as essential; but Eko’s services did,” Abhinav explained.

To overcome this, the company obtained government-approved ID cards for its partners. “Eko sent messages informing all my customers about the availability of services. The company also provided me with all necessary documents and certificates which helped me run my business even during the lockdown,” said Sunil Kumar, a Chennai-based Eko retail partner.

An interesting trend emerged during these disruption too. “During the lockdown, lots of people lost their jobs. So, a large number of individuals, servicemen, and teachers, among others, enrolled with Eko to provide the services to the migrant community… We have seen a very large increase over the rural network; when the government dispersed money into Jan Dhan accounts, a lot of people wanted to access their cash, and so people in the rural areas latched on to us,” Abhinav said.

Post-Covid-19 changes

Although the company was able to adapt in the Covid-19 era, it was not without hurdles. “April was a bad month for us. Remittances declined by close to 90 per cent. In June, they picked up again by nearly 50 per cent, while July was a straight line. It is only recently in August, post Janmashtami, that there has been another spurt of growth in remittances,” said Abhinav.

“It’s a sign of people coming back to larger cities. We’re actually a very good barometer to measure how the economy is bouncing back — June was a shade lower than 50 per cent, July was over 50 per cent, and August is seeing slightly more confident growth,” he added.