Many Indian households grapple with annual earnings between Rs. 12,500 and 50,000. The COVID-19 pandemic exacerbated the financial strain, especially in rural areas reliant on daily labour and agriculture.
Despite being one of the fastest-growing economies, India bears the brunt of widespread economic inequality. This discord, impacting women and children predominantly, beckons a shift towards a social framework accentuating adaptive financial services, quality education, and universal healthcare. Another concerning trend is the hesitation among individuals to venture beyond their financial comfort zones, often leading to a resignation towards debt-laden lifestyles. The pathway to prudent saving begins with intention and discernment of suitable investment avenues.
Gold emerges as a beacon of financial security for those lacking the apt awareness or the availability of suitable choices to navigate other financial instruments for future stability. While certain government-endorsed micro-savings schemes exist, they typically yield a 7-8% annual return, whereas gold has historically surpassed a 10% annual return. Gold stands as a reliable asset and an emergency reserve while concurrently nurturing people's aspirations towards an enriched future.
The essence of micro-savings in gold transcends mere fiscal prudence; it embodies a low-threshold, intuitive approach towards savings. This concept alleviates the complexities often associated with other financial instruments, acting as a linchpin for inculcating a savings culture among rural and underserved demographics. With gold prices being widely recognized and its value acknowledged over time, the emotional resonance of this asset simplifies the savings narrative.
Central to the efficacy of micro-savings in gold is the incorporation of a digital platform facilitating trades in small denominations. Customers can transact in modest amounts, receiving corresponding credits in milligrams of gold. The price, fixed at the purchase date, ensures value retention, potentially yielding 4-6% additional grams of gold over a year. The streamlined initiation process circumvents cumbersome KYC procedures, although adherence to these procedures is advocated for enhanced security. The liberty to save at one's pace, anytime, anywhere, empowers customers with control and flexibility.
Moreover, micro-savings in gold come to the fore during financial exigencies. Its immediate liquidity, swift Turn-Around-Times, and absence of unwarranted deductions render it a dependable financial ally. Additionally, micro-savings in gold pave the way for favourable gold loan opportunities. The digital format of gold guarantees purity, thereby eliminating the subjectivity often encountered in purity assessment when pledging physical gold ornaments. This digital purity translates to superior loan value, making micro-savings in gold a prudent, flexible, and rewarding financial endeavour.
Micro-savings in gold are not just a financial mechanism; it's a catalyst for rural empowerment and a stepping stone towards bridging the economic disparities pervading Indian society.
Jaydeep Banerjee, Co-founder of Dvara SmartGold