India is home to 1.3 billion people, and the number of individual who approach banks and financial institutions for loans and other financial products and services is increasing with each passing week. As a result, the traditional lending market in India has undergone significant changes in recent years thanks to the Fintech boom in the country.
What is a Fintech?
Fintech is short for Financial Technology, and the sector has developed a strong reputation for its dynamic and fast-paced nature. While the sector was pretty much unheard of until demonetisation, the economy’s formalisation saw Fintech companies grow exponentially and turn into one of the most ingenious industries around. With each passing year, the Fintech sector keeps its financial edge intact with the incorporation of state-of-the-art approaches in addition to vigorous changes that help it grow further.
The Need for Digital Lending
Ever since modern banking was introduced in India, the loan application process has been regarded as too lengthy and cumbersome because of the time consumption and stress involved. Fintech companies took notice of the situation in the traditional lending market and created an easier way for borrowers to gain access to funds instantly. Digital lending became the new big thing in the financial market due to its advanced nature and the ability to borrow money in little to no time. Paperless approvals and disbursals in addition to attractive interest rates have helped Fintech companies well and truly change the face of traditional lending in India.
Fintech companies provide financing within 24 hours. Sometimes, it takes a matter of minutes to apply for a loan and have the funds credited to your bank account. With the advancements in technology, you no longer have to visit a bank and wait in long queues to avail a loan. Your financing requirements can be fulfilled with a simple click of the mouse on a digital lending platform. There is no need to physically submit your documents either, as they can easily be uploaded on the lender’s website. All you have to do is visit the website of a Fintech company, enter the required details, and apply for a loan.
Factors Contributing Towards the Rise of Fintechs in India
Here are some of the key factors that are helping Fintechs raise the roof:
• Technology: Technology has perhaps been the biggest factor contributing towards the rise of Fintechs in India. The main reason why digital lending platforms find themselves in the driver’s seat is the use of technology. The presence of software and systems to check documents, process loan applications, approve the application and disburse the loan amount, has made it easier for customers to borrow money. The consistent upgrade of software and tools has reduced the amount of time taken to complete a loan application, thereby leading to the rise of Fintechs.
• Hassle-free process: A lot of time was wasted and too much unnecessary stress was taken by customers when borrowing through the traditional lending system. Visits to banks and long waiting times for the loan application to be processed and the amount to be disbursed is now a thing of the past. Digital lending platforms have made the entire process smooth and hassle-free so that customers can apply on their mobile devices and track their application with ease.
• Attractive interest rates: Every customer wants the lowest possible interest rate when taking a loan. Fintechs basically list out banks and the interest rates on offer in a simple manner so that it is easy for the customer to compare the options at their disbursal and pick the one that best suits their needs.
• Transparency: The entire loan process is simpler and more transparent with Fintech companies. You can track your loan application from the moment you apply for it until it has been disbursed. Even if the application is rejected, you will be notified about it along with the reason why your application was not approved so that you can correct the same and apply again.
• Best option for emergencies: Fintechs are the ideal option for loans in case of emergencies. Considering the fact that your application is processed in minutes, you can get instant access to funds and meet emergency financial expenses such as medical bills, repairs to vehicles in times of accidents, paying for weddings, etc.
• Paperless process: One of the key differences between traditional lending practices and digital lending platforms is the use of paper. Earlier, when you applied for a loan, you would have to wait for the bank to approve your application after which you would have had to submit physical copies of your documents at a branch of the bank or to a representative who would visit your home or office. With digital lending, your documents can be uploaded online with ease, thereby eliminating the use of paper whilst also saving valuable time.
• Security: When you take a loan, you will have to submit certain documents and furnish certain details to the lender. Your ID proof, address proof, account details, etc. are necessary when availing a loan. Identity theft has become a major cause for concern in recent years, but digital lending platforms use software tools that ensure that all the information you provide is secure and safe from hackers.
There is no doubt that fintech companies have come a long way since their inception. They have made life easier for anyone who wishes to borrow money, helping you save time whilst ensuring that there is little to no stress involved in the entire loan application process. So, if you wish to apply for a loan to meet any kind of financial emergency, fintech platforms are quite handy as your application will be processed relatively quickly and disbursal within very short period of time.