Deepening financial inclusion for migrants in India

Chalo Network aims to deepen financial inclusion for migrant households in India. India has over 18 million international migrants and 500 million internal migrants. Of the 500 million, 63 million migrants live in India’s urban areas. Predominantly locked into the informal economy, city life is precarious, expensive and exclusionary for low-income migrants. They are dependent on informal networks and petty contractors for wage advances or informal loans to gain a footing in the city. The COVID-19 pandemic and resultant lockdowns in 2020-21 devastated the informal economy, thereby severely reducing low-income migrants' access to liquidity, information and opportunities in urban areas.  

Multiple surveys have confirmed that low-income migrant households continue to earn less than their pre-COVID incomes.  The situation is further exacerbated as formal financial markets do not lend to low-income migrant workers - their footloose and informal livelihoods are not deemed conducive from a risk management perspective. 

Migrant households depend on last mile Banking Correspondent Agents (1.32 million) and Common Service Centres (1.5 million) -- the largest network in the world. But our experience of running an agent network (>100 agents) since 2021 suggests that the banking agent model is limited to micro-ATM, payments and documentation related services and is unsustainable for services beyond that. While a lot of service providers have initiated app-based service delivery and smartphones are widely used by migrant workers, most of these apps are unsuitable for the needs of migrant workers: Installing different apps, understanding each app, space issues in the phone, not having updated android versions, language challenges etc. are some constraints migrant workers face. 

Additionally, migrant households - due to their multi locational households, poor quality of data, high acquisition and repayment costs - are also not able to access credit. These factors make it difficult for providers to service them in comparison to non-migrant households. As a result, low-income migrant households remain financially underserved.   

The Chalo Network aims to remedy the situation as a platform for providing suitable financial, welfare, documentation and healthcare services to low-income migrant households in India through a strategic last mile agent network and WhatsApp bot. The Chalo Network also provides credit and affordable financial services to both international and internal migrants in India. 

Our vision is to build a one-stop platform for migrant households to access all documentation, KYC and financial services. Operational since 2020, our current iteration has 3 offerings:

• Chalo Agent Bot: A WhatsApp based bot agent (“Chalo Saathi bot”) providing end-to-end documentation and financial services. We aim to replace the offline agent through this bot for first time smartphone users who depend on WhatsApp (> 500 million users in India) for all their transaction and documentation tasks. The bot is currently LIVE for customer testing and offers end-to-end PAN Card issuance (the primary tax ID), in English and Hindi. In the next one year, we aim to expand documentation services, and add financial services to the bot in all major Indian languages. 

• Chalo Credit and Credit Score: We have developed an affordable and easily accessible on demand credit solution for international and low-income internal migrants. The loans provide essential liquidity for migrant households in emergency, housing needs, migration/travel needs and general consumption needs. To enable this product, we have onboarded overseas employers of Indian workers (through our group recruitment company) and India based lending companies. This process will be further enhanced by theChalo Credit Score is a proprietary risk evaluation methodology developed specifically for migrant and their multi locational households for accessing affordable loans from banks, NBFCs and MFIs. By leveraging quality information about the financial lives of migrant households, at both source and destination, we can assess risks and identify future cash flow throughout the migration cycle using AI/ML based predictive analytics. Lenders will get personalised insights for affordable and suitable products based on the needs of each low-income migrant customer. Customers will get detailed insights to improve their credit health and score. We have applied our niche expertise in migration studies, financial inclusion and data science to develop the Chalo Credit Score. 
• Chalo Agent Network:  Our award-winning last mile agent network embedded in key migration corridors within India provides essential services to low-income migrant communities. Our network has partnered with a host of government and private service essential providers connecting them with underserved customers while also creating financial awareness among our consumer bases. 

Our solution serves international and internal migrants, who owing to their multi-locational household status miss out on financial services like credit. Extensive research on internal migration has shown that migration into urban areas self-selects for the most productive rural Indians, giving us a pool of risk-taking, economically capable i.e., highly lendable prospective customers.  Unfortunately, this information is completely locked into informal markets based around social networks and informal contracts. To reduce the risks faced by managements and underwriting requirements of banks and NBFCs, this information needs to be standardised, structured and quantified. 

India receives the highest number of remittances in the world. However, blue collar and grey collar workers when planning their journey, often rely on informal advances or sell their property to pay for the cost of migration.

 At Chalo Network, we want to enable credit for migrant communities both for internal and international migrants. We also want to ensure that migrant workers have access to documentation services that are prerequisites for any financial and government entitlements. We do this, using a WhatsApp bot that provides end-to-end documentation support. For the credit origination, we rely both on our offline (last mile agents) and the WhatsApp bot.

 Our solution helps migrant communities by firstly, getting access to credit which was not available previously using formal channels; and secondly, reducing the cost and time in accessing documentation services as they can now avail support on their phones.

 It is well established fact that migration improves the standard of living of any migrant household. Our aim is to better facilitate this migration process and improve the incomes of migrant households by removing the barriers they face while accessing financial services.

Chalo Network is the implementation arm of India Migration Now, a research and advocacy organization working with internal and international migrant households since 2018. The team at IMN has built Chalo Network with our extensive expertise of working with on-ground migrant communities across India. The team works remotely and comes from major migrant-receiving and sending locations. Everyone in the team is driven by migration, most of us are migrants ourselves. Everything that we do at IMN and Chalo is driven by the needs of migrant communities. The transition from an offline agent model to a WhatsApp bot model and the need for affordable credit is based on the demand and requirements of migrant communities directly.

 WhatsApp is a popular service among migrant communities. They often do not prefer downloading an app for each service. At destination, to get a document updated, a worker has to lose out on their wage for a day. The WhatsApp bot makes this process faster, fairer and most convenient since the worker can do it on their phone itself. The bot is available in English and Hindi at present and our aim is to update all services in all migrant languages by the next one year.

Since the beginning of operations in 2021, the network has served 45,000 customers, completed 1,50,000 transactions and offered services like ID documentation (update and correction), KYC support, cash in, cash out, remittances, vaccination related services, entitlements, G2P payments and health insurance etc.

We believe that through its tremendous network and technical expertise, Solve will help us connect with the right people to improve our tech offerings to underserved migrant customers. We also hope that Solve will give us a platform to network with like-minded entrepreneurs and technology experts worldwide to scale our solutions. In addition, we are also looking for fundraising support to build our tech platform and support our operations.

WhatsApp is a popular service among migrant communities. They often do not prefer downloading an app for each service. At destination, to get a document updated, a worker has to lose out on their wage for a day. The WhatsApp bot makes this process faster, fairer and most convenient since the worker can do it on their phone itself. The bot is available in English and Hindi at present and our aim is to update all services in all migrant languages by the next one year.

We also aim to use our bot and the offline agent network for originating credit and use our expertise and knowledge of the migrant communities to develop a credit score that presents a truer image of their borrowing capacities.

At Chalo Network, our aim to deepen financial inclusion for migrant communities in India. We aim to ensure, low income migrant workers and their households do not miss out on financial services, because they are migrants.

In the next one year our target is to increase the agent transactions to 3,00,000 from 1,50,000, originate the first 500 loans and onboard at least 5 lending partners and ensure that the WhatsApp bot has all the documentation and financial services available in all major Indian languages. 

We use WhatsApp as the main technology and have integrated it through APIs for ensuring end to end delivery of services.

Our core team is 90% female. One of the co founders is female and the other male. Some of our core values is Mindfulness of the environment & society: Be sensitive to the environment and the communities we live in and Mutual Respect: Treat each other the same irrespective of position or experience. As an organisation working with migrant communities and as a young team with a lot of women, we understand the issues, and often stereotypes that women have to face and ensure that everyone in the team considers their workspace a safe space.

•Chalo Network is a B2B and B2C platform that connects financial service providers with low income migrant workers and their households

•The company earns revenue through an origination fee and sale of services on the platform

•Chalo Network acquires customers digitally through WhatsApp, social media and using offline agents.

•Based on the business model, some of the core metrics are the number of customers, number of migrant customers, number of female customers, number of offline vs online customers, number of loans originated.

•Chalo Network aims to expand its agent network and achieve a total of 3,00,000 transactions offline, 3000 transactions via the WhatsApp bot and  originate the first 500 loans in the next 1 year.

We are raising $2,00,000 that will help us originate credit for the first 1500 migrants, serve 9000 through our whatsapp bot. Weare looking for equity and grant support, along with debt for loan guarantees and CSR support.

About Chalo Network’s organisational structure  

Chalo Network is the for-profit initiative of India Migration Now, a leading migration research and advocacy initiative based out of Mumbai. South East Migration Foundation is our CSR funded non-profit based in India. Chalo Network also has another for profit sister concern Karmaa Now which recruits and skills potential female international migrants. SEMF supports Chalo Network’s last mile agent network through its CSR support and Karma Now supports in accessing potential borrowers and connecting with employers. 

In the last one year, Chalo received support from Meta and Turn. Io for building the WhatsApp bot for migrant communities. We are also part of Village Capital’s Accelerator for Financial Inclusion of Migrants through which we aim to onboard lenders and improve our solution. In the next one month, we will also close our partnerships with the first round of employers and lenders. Previously we have been supported by Dvara Trust, JP Morgan Chase and Nudge Launchpad (winners of the Equal Cities Challenge 2020)