In yet another significant step to provide integrated financial services to Indian farmers through e-choupals, Megatop Insurance Services Limited (MISL) an Associate Company of ITC Limited has signed a contract with the Financial Deepening Challenge Fund (FDCF), sponsored by the Department for International Development (DFID) Under this contract, MISL will create awareness about insurance and provide best possible insurance services to farmers at their doorstep in the villages of Andhra Pradesh and Madhya Pradesh through ITC’s existing e-choupals. For this purpose, FDCF will provide grant of Rs. 5.80 crores (GBP 729, 285) over a period of three (3) years to enable MISL to reach out to and serve these farmers. This is the largest project of FDCF in India.

ITC’s e-choupal is the biggest IT intervention by any corporate in rural India. The e-choupal model is a value-driven mechanism where each participant derives benefits from his association. This model truly exemplifies "the competitive advantage of corporate philanthropy". Similarly, FDCF is a pro-poor initiative with focus on commercial viability. Thus, it is a partnership of two similar initiatives trying to create opportunities for the poor.

About FDCF

The FDCF of DFID is the UK Government’s initiative aimed at developing public-private partnerships that benefit the poor. In July 2001 the DFID unveiled, for the first time in India, an initiative called the FDCF in Andhra Pradesh and Madhya Pradesh. This fund, having a corpus of £20 million, is working in 15 countries in South Asia and Africa. This fund provides matching financial assistance to sound profit-oriented business organizations operating in the financial services sector. The objective of the fund is to encourage these organisations to design and develop innovative financial products/services for the lower strata of society that were previously denied access to any kind of formal financial products/services.

FDCF’s grant will help pro-poor projects stablise in the initial years by covering the costs of setting up, marketing, recruitment and training, as well as subsequent recurring expenses, over a period of three years. The project requires the creation of large-scale insurance awareness in the target markets, which will result in insurance penetration, creation of a network for direct marketing and the designing of customized products for future target segments.

Deloitte Haskins & Sells has been appointed as the administrator of FDCF. It will also monitor and supervise the funded projects.

"This grant will help us provide the best possible insurance services to rural customers and become the most preferred choice for farmers in rural India. We aim to be the largest Insurance providers in India with major customer base in rural markets. We are leveraging ITC’s e-choupal network to penetrate rural markets," stated Mr.C.V.Sarma, Director, MISL.

Mr. Garry Whitby, Global Fund Manager – FDCF, who signed the contract in Hyderabad on behalf of DFID, said, "We are proud to be associated with this project. We believe this is a step in the right direction as e-choupals would be the supermarkets of tomorrow in rural India."

Ms. Chandrika Shah, Country Manager – FDCF, added "FDCF funding will further enhance the utilization of the e-choupal network to bridge the digital divide by adding financial products to its gamut of services".

About the e-choupal network

e-choupal is ITC’s pioneering contribution to enhance the global competitiveness of Indian farmers. It is a movement which is enabling the transformation of traditional farmers into new age marketers. e-choupal helps farmers readily check both futures prices across the globe and local prices before going to market. It gives them access to local weather conditions, soil-testing techniques and other expert knowledge that will increase agricultural productivity. e-choupal has emerged as a model for all developing countries.

At present, there are 1,700 e-choupals in Madhya Pradesh and 3,000 in India, serving 18,000 villages, reaching out to 1.8 million farmers. ITC plans to cover 100,000 villages, or one-sixth of rural India, over a decade.