How to Market Digital Financial Services in Rural Areas

Integrating digital financial services (DFS) into daily life and business has been a growing trend in recent years. Mobile banking, e-wallets, and digital lending have contributed significantly to revolutionising the provision of financial services, as it has enhanced access to such services. People can now carry out a wide range of financial operations from the comfort of their homes. Despite this increased accessibility, it is still being reported that adoption rates are uneven, with rural communities displaying considerably reduced usage of DFS (Funke et al., 2024; Quarshie, & Asare, 2023; Wu, & Peng, 2024). The question that emerges logically is: why is there an adoption lag in these communities?  

Sourcing for empirical secondary sources, this article, from a marketing viewpoint, seeks to provide an overview of major factors to consider when enhancing DFS penetration in rural communities. The reduced integration of DFS into the daily lives of rural communities is clear evidence that one needs to go beyond conventional marketing practices to gain widespread adoption of DFS in rural communities. Unlike urban centres, inhabitants of rural areas face some unique barriers relevant to DFS dissemination. Research has reported that the following factors are significant inhibitors to DFS promulgation.  

Limited Digital and Financial Literacy 

Though mobile phones have become quite common in rural areas, their usage is actually quite limited as locals make use of them principally for basic communication (Ayimah et al., 2023; Quarshie, & Asare, 2023). What is more is that the level of financial literacy in such communities is considerably low (Funke et al., 2024). In such a configuration, it is obvious that DFS will have low adoption rates.  

Cultural and Behavioural Barriers 

Rural communities generally have well-established informal financial practices that they perceive as more trustworthy than formal financial services. This is further reinforced by the strong inclination towards respecting traditional practices and resisting change (Busck & Schmidt, 2020). In that light, Mendas (2016) highlights the tendency of rural communities to be considerably resistant to external impulse change. Such settings, therefore, render it more challenging for DFS penetration.  

Infrastructure Deficits 

Though mobile phone penetration in rural areas has been increasing considerably, the infrastructure that should accompany this penetration is lagging in most rural areas. Aspects like stable internet connectivity, as well as unreliable power supply, limit the use of these devices in rural places (Zhang et al., 2021; Tiwari, 2016; Fendji, 2015). This might also contribute to reinforcing the already reported mistrust in carrying out financial operations through such devices (Ayimah et al., 2023).  

Despite these challenges, empirical studies present some measures that could be taken to enhance the DFS penetration of rural communities. Some of the most prominent might include:  

4Ps of Marketing 

The commonly used 4P framework could be used to tailor DFS to fit the needs of rural communities: 

Service Customisation: Services must be simplified and tailored to the needs of rural users. Language used as well as the process could be kept quite basic and very easy to use. In addition, DSF could also be customised to run on non-smartphones.  

Pricing Strategy: DFS should offer low or no transaction fees for basic services to encourage adoption among low-income populations 

Place (Distribution) Strategy: Using local agents or mobile kiosks (agent banking) enhances reach and builds trust. Collaborating with community leaders and cooperatives can increase visibility. This is quite relevant since it enhances tangibles. Tangible, amongst others, is considered a significant contributor to perceived service quality.   

Promotional Campaigns: Localised marketing using radio, community meetings, folk media, and vernacular language ads increases relatability. Testimonials from early adopters in the community can drive word-of-mouth marketing. 

Other Measures 

• Education and Awareness 

Financial and digital literacy campaigns are essential in empowering rural populations to tap the benefits of DFS. Including local leaders and influential figures in the delivery of financial literacy training programs also goes a long way to increasing the receptiveness of these populations, as this would be viewed as an eternal push for change in behaviours.  

• Trust-Building Measures 

Offering money-back guarantees, transparent pricing, and customer support in local languages as well as other trust reinforcement measures, would help reduce perceived risk. 

• Community Engagement 

Rural communities tend to be quite close and generally prioritise the well-being of the community. One would easily find multiple associations, like farmers’ cooperatives, Rotating Savings and Credit Associations (ROSCAs) and religious communities with high levels of cohesion. Initiating and maintaining long-term partnerships with such community-oriented associations might enhance the openness of these communities to integrate DFS into their lives, as their perception of DFS becomes more and more closely tied with that of these associations. 

Ensuring increased levels of DFS adoption in rural areas requires more than applying conventional marketing practices. The integration of more community-based approaches could go a long way to enhance adoption levels. This, of course, requires more effort on the part of DFS providers. It is also worth noting that while rural communities might have low purchasing power and could be viewed as less attractive market segments by DFS providers, these communities tend to be very loyal, providing low but steady revenue, which becomes profitable in the long run. The absence of traditional financial services in such communities also offers the opportunity for DFS providers to apply the blue ocean strategy and secure considerable market shares. 

By Clement NDINDAH NDIFOR, PhD 
Head of Department at Department of Business, School of Doctoral Studies, Unicaf University (Cyprus)
DFI Community Member and Subject Matter Expert  

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