It is public knowledge that India is predominantly a cash-based economy and digital payments, up until recently, weren’t widely used. Besides this, even at the elemental level, an outsized chunk of India’s population didn’t have bank accounts even a decade ago. Recent years have seen an increased emphasis on financial inclusion with the govt making it one of the first goals in terms of economic policies. one among the essential aspects of monetary inclusion is adequate access to credit for the country’s population no matter their geographical location.
Rising demand and therefore the changing lending landscape
There has been a surge in demand for seamless access to credit and customers who fall into the New-to-Credit category like millennials, GenZ professionals, and therefore the underserved population, particularly the salaried individuals in Tier-II, Tier-III, and Tier-IV cities, are increasingly trying to find easier access to credit from verified sources. Although salaried individuals can apply for loans from formal institutions like banks or NBFCs, they’re often denied access thanks to a scarcity of credit history.
Facilitating financial inclusion across the country
Despite not being a completely alien concept, digital lending has gained traction only over the past few years with the emergence of tech-driven startups and therefore the digital revolution. A potent force, digital lenders transcend geographical boundaries with innovative solutions and quick loan sanctioning to permit customers even within the country’s hinterlands, easier access to credit
Digital lenders have a high risk-taking as against banks, thereby enabling them to lend to lower-income segments of the population also like that new credit. They also offer innovative products like microloans and short-term loans that allow lower-income individuals to gradually build a credit history with small loan amounts without falling into a debt trap or facing an immense burden.
More than metro cities, it’s the Tier-II, Tier-III cities, and therefore the country’s remote regions that majorly lack access to credit and find it a hurdle to avail credit from trusted, formal institutions. By leveraging cutting-edge technology and digitizing their end-to-end application and approval process, come to the rescue of this underserved segment of the population. Increasing internet proliferation and smartphone usage have allowed digital lenders to facilitate financial inclusion for the underbanked population, enabling them to avail loans from the comfort of their homes with no paperwork and quick processing.
The digital lending landscape has evolved unimaginably in recent years and can indisputably still be driven by technological innovation and new-age startups within the sector looking to revolutionize the way lending happens and make sure that India’s underserved population gains hassle-free access to credit. By focussing on the country’s lower-income segment and underbanked population offering them instant loans that are more convenient, digital lenders are reliable sources of credit and are sure to be at the forefront of driving financial inclusion throughout India within the coming years.