Emerging Insight: Clients prefer flexible contribution levels and focus on wealth accumulation in savings products

1 March 2023

Dvara KGFS is a non-banking financial company operating since 2008, serving individual customers and enterprises in remote rural areas of India. Dvara KGFS aspires to be a one-stop shop for customers' wealth creation and risk management by offering a combination of credit, savings, investments and insurance solutions.

As part of a project with the ILO on integrated risk management solutions, Dvara KGFS designed an offering of products that were anchored on savings to help members improve their savings behaviour and accumulate, while protecting them from risks. To better understand the savings habits of members, Dvara KGFS conducted market research.
The following key lessons were learnt from customers during the market research:
  • The financial goals of the customers are more closely related to their income level than their profits, meaning that at times the goals may be aggressive and difficult to reach.
  • Accumulation of wealth is more important than returns earned on the savings, meaning that flexibility in contributions and protection of assets are more important factors than the interest rate.
  • A majority of the customers are willing to save 500 to 1,000 Indian rupees (US$7 to US$14) per month for two years or more.
  • Gold is the most favoured tool of investment for majority of the customers.
  • Customers know about chit funds (a form of rotating savings and credit association system), but few participate (15 per cent).
  • Investment in mutual funds is almost unheard of in this customer base.
Dvara KGFS incorporated these finding into the design of its product offering that included a systematic savings plan for gold, hospital cash, life and personal accident insurance. As of 31 July 2022, KGFS has enrolled 64,161 customers. Of these, 7,768 customers have successfully completed their 24-month gold systematic investment plan and redeemed their savings.

To learn more about the products and technology used by Dvara KGFS, read our latest Social Finance Brief.