State-owned fuel retailer Indian Oil Corporation (IOC) plans to sell insurance products through Kisan Seva Kendras (KSKs), it retailing outlets in rural areas.
MUMBAI: State-owned fuel retailer Indian Oil Corporation (IOC) plans to sell insurance products through Kisan Seva Kendras (KSKs), it retailing outlets in rural areas.
The company is in talks with Max New York Life to sell the latter’s products through the KSKs. IOC is also looking for a tie-up with Dena Bank to open ATMs at the KSKs.
“We are in talks with a couple of companies to sell their products through our rural petrol pumps and are also looking at offering insurance products as well,” said a source in the company.
KSKs are low-cost petrol pumps which could be set up at 16% of the cost of an urban pump. “It costs around Rs 8 lakh to set up a KSK against Rs 50 lakh for an urban petrol pump. For KSK, the land is owned by the dealer and the infrastructure cost is borne by the company,” he said.
“The main idea behind the KSKs was to meet the fuelling requirements in rural areas, predominantly farmers, right at their doorstep,” he said.
He said once the idea took off well with the rural masses, IOC realised it made good business sense to start retailing agri-products such as seeds and fertilisers and products of daily need at these centres. Eventually, tie-ups with several FMCG companies such as Dabur, Emami, HUL and seed and fertiliser companies were forged.
The source said Max New York Life has ambitious plans to penetrate into rural India so a tie-up with IOC will be a good strategic move.
In 2007-08, IOC opened 726 rural outlets taking the total number to 2,000 KSKs across the country. “As the KSKs have been a big hit with the rural masses, we are very aggressive with the concept and plan to add another 800 outlets in the current fiscal,” he said.
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