{"id":33185,"date":"2020-05-23T17:59:29","date_gmt":"2020-05-23T12:29:29","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=33185"},"modified":"2023-07-06T20:46:21","modified_gmt":"2023-07-06T15:16:21","slug":"fintech-lending-in-india","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/fintech-lending-in-india\/","title":{"rendered":"Fintech Lending in India: Changed style of lending"},"content":{"rendered":"

India is a big consumer market<\/a> therefore it is fairly complex in regards to geography, cultural inclinations, and consumer behavior. In respect of any product or service, there may be more than one consumer segment where each has a unique way of buying. In all of it a common factor has been the mobile connectivity and swift acceptance of the internet which has influenced the buying decision of a person. Technology is a vital support for the proper function of the business. Full leveraging in the business and digitalization in the lending business began with Fintech lending in India i.e., by fintech companies. Fintech lenders have been primarily focussing on the two aspects i.e., urban individual consumers and the MSME (Micro, Small and Medium Enterprises).<\/p>\n\n\n\n

Role of Fintech lending in India (SME and MSME)<\/h2>\n\n\n\n

The fintech players have understood the different stages of the life cycle of SME (Small and Medium Enterprises) and MSME (Micro, Small and Medium Enterprises) through data analytics. They have also realized their monetary requirements that differ in each phase. Based on this insight the industry of fintech lending in India is also exploring the other form of lending like the Point of Sale based lending, invoice based lending, P2P (peer to peer) lending, and short term lending, etc. <\/p>\n\n\n\n

MSME (Micro, Small and Medium Enterprises) is the backbone of the Indian economy because of its contribution to the country’s GDP<\/a><\/strong> (Gross Domestic Product). Despite playing a critical role in the growth of the Indian economy, MSMEs<\/a><\/strong> still face a lot of challenges, for instance lack of Capital. This is the place where Fintech plays an essential role as it has the ability to resolve the credit availability issue. MSMEs now don’t require going through the tedious process of documentation and frequent visits to the bank as many startups are offering quicker access to loans.<\/p>\n\n\n\n

Digital Lending<\/h2>\n\n\n\n

With the build-up of the alternative lending space, the digital lending models are providing to the huge unfulfilled demand for credit. As per a 2019 report the Indian digital credit market shall experience a 36% growth in a few years from now. The digital credit markets are now rapidly evolved by the agile processes, digitization, lean organizations, etc. it has the capacity to be a game-changer for Small and Medium Enterprises as fintech working capital loan solution is productive at a lower scale.<\/p>\n\n\n\n

Alleviating risks of non-payment<\/h2>\n\n\n\n

It is fascinating to watch that fintech platform is alleviating the risks that arise with the business opportunities. Retail Point of Sale and payment processors is generally a better option than banks in order to assess the risk of lending to small merchants. The credit providers know about the daily transactions of a merchant. Since the flexible repayment automatically gets processed by the systems the process of collection is facilitated substantially. The merchants also benefit from the tech-driven process due to the presence of the integrated payment systems. The time gap between the loan application and funds payout is few due to many firms of fintech lending in India.<\/p>\n\n\n\n

Also, Read:<\/b> Peer to Peer Lending Business: Pioneering the Fintech Industry<\/a><\/mark>.<\/p><\/div>\n\n\n\n

Business models of Fintech lending in India<\/h2>\n\n\n\n