The loud clattering of iron echoes far beyond the walls of the workshop where Mahesh runs his loom in Mysuru, India. The large metal frames and gears of the loom move in harmony for long hours to weave the warp and wefts of glimmering silk threads into intricate borders and motifs of a saree, a long traditional garment worn by women in India. “For 20 years, I have done this [saree-making] work,” Mahesh shared, recalling his experience of working in a textile factory in Bengaluru, where he learned how to run a power loom.

Mahesh once relied on farming to provide for his family, growing vegetables and sugarcane on their 1.2 hectares of land. Smallholder farmers make up 86 percent of all farmers in India, but are among the poorest segments in the country with an average income of nearly 13,000 Indian Rupees ($154) a month — a majority of which comes from wage labor. “Income from vegetables is irregular. It might come, it might not come,” shared Mahesh. Low production and price fluctuations of agricultural produce — exacerbated by extreme heat, erratic rainfall, and damaging pests — force smallholder farmers to migrate to cities in search of livelihoods. Mahesh moved to Bengaluru, a nearby city, to seek a more reliable source of income, where he learned how to make silk sarees at a textile factory.

When the COVID-19 lockdown forced millions of migrant workers to leave cities, Mahesh also decided to move back to his village and start a small enterprise to supplement his income from agriculture. Small business owners often face capital constraints that hold them back from starting and sustaining their enterprises. Despite their crucial contribution in steering economic progress, micro, small, and medium size enterprises (MSMEs) face challenges in accessing sufficient financing to meet their working capital requirements. The MSME credit gap in India is estimated at $230 billion.

Mahesh, and his wife, Jeevitha, used their savings to buy a semi-automated power loom to start his saree production unit closer to his home. To increase production and grow his income, he decided to invest in another machine unit and applied for a small business loan from Accion’s partner, Dvara KGFS.

Dvara KGFS is helping its rural customers build financial resilience by improving their access to credit, savings, and insurance services through a combination of traditional physical branches and digital banking. Accion has supported Dvara with developing a digital omnichannel strategy to boost operational efficiency, expand Dvara’s agent network, build a WhatsApp conversational platform to improve customer engagement and integrate their platforms with the Unified Payments Interface (UPI) to drive digital repayments. Accion Advisory also provided consultation support to improve lending to MSMEs, who often face ‘first-borrower’ challenges, such as a lack of collateral and credit history, and lack of digital transactions leading to inadequate business records.     

“I was asked for my Aadhar [identity] Card for the KYC process. The bank and passbook information were taken,” Mahesh shared, adding, “It only took about two days. The process was quite easy.” Wealth Managers, Dvara’s frontline cadre, helps customers get acquainted with digital repayment methods and WhatsApp chatbot to access account-related information on their phones, without traveling to the branches. “They [Wealth Manager] will explain how we can use the WhatsApp chatbot to check what is the principal amount, how much EMI we have to pay, what the interest is, and other details,” shared Mahesh.

Access to account information and banking services on phones helps customers, particularly women and those located in remote rural areas, mitigate the risk of loot or theft, save time and cost needed to commute to bank branches, and avoid loss of valuable wages. “More than 833 million people live in rural India, with inequitable access to financial services as the rest of the population,” shared Debdoot Banerjee, Senior Director of Digital strategy and Transformation at Accion. “Digital banking can empower these rural customers by breaking barriers of distance and time, offering access to customer-centric, responsible financial services at their fingertips. We have worked with Dvara to extend these services to the underserved segments to ensure every community thrives, no matter how remote.”

“For sarees, we are paid 400 rupees ($4.78) per piece. It takes four hours to make one saree. We earn approximately 40,000 Rupees ($478) from this business, when the machines work for 12 hours a day.” shared Mahesh. From his income through sarees, Mahesh is repaying his loan and learning to use digital financial services to grow his business and ensure the wellbeing of his family.

With aspirations to build a house for their family and continue the education of their 9-year-old daughter, Mahesh and Jeevitha meticulously work their looms producing magnificent sarees out of glimmering silk threads. “We have to pay for our daughter’s schooling … and we have to run our household,” says Mahesh. “And we have been able to do all this with this additional income [from our sarees].”