Digital Lending in India

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Indian Business Ecosystem

Earlier, the success of business in India was dependent upon various factors including government licenses, bureaucracy, availability of finance and such others. Availing finance was a major concern for start-up as well as growing businesses due to the amount of paperwork involved.


Digitisation has changed the lending system in India. Business landscape has evolved over past few years and has become more competitive and diverse with technology upgradation & easy financing options. Government measures such as GST & Demonetization have led entrepreneurs and businesses to operate in a formal business environment which in turn helped in creating digital footprints for them. This has helped new age lenders in assessing the creditworthiness of Small & Medium Businesses.

Digital Lending in India

Scope of Digital Lending in India

According to NASSCOM, the Indian fintech market is expected to grow at a CAGR of 22% for the next five years. Digital lending is offering a potential source for borrowers who have not been able to avail financial services through traditional sources.

As per MSME 2017-18 Annual Report, there are 63.39 million MSMEs in India. Around 70% of MSMEs don’t have access to institutional finance, according to ASSOCHAM report. Digital & Innovative Players are expected to be a major part in the process.

Technology Transforming the Lending Industry

Lending was perceived to be a process of physical submission of documents, regulatory compliances, lengthy credit assessment and so on. New technological development has already transformed the lending sector and we are going to experience significant changes in the finance sector in coming years.

Here are some of the technologies that will change the way we manage our finances:

  1. 1. Blockchain Technology: will decentralize financial management & uses blocks and encryption to carry out secured financial transactions.
  2. 2. Artificial Intelligence: has the potential to transform all banking operations with its self-improving programs.
  3. 3. Cloud Technology: supports Big Data, Artificial Intelligence, Blockchain and Internet of Things (IoT). It will provide much-needed bandwidth to meet rising demand for digital transactions.
  4. 4. Chatbots: are using natural language processing to resolve the queries of customers. The quality of interactions & speed of responses will certainly improve with more experience.
  5. 5.Robo-Advisors: will provide transparent and quality finance advisory across demographics.

Benefits of Rising Digital Lending

  1. 1. No human bias.
  2. 2. More transparency.
  3. 3. Greatly reduce paperwork.
  4. 4. Low interest rate for customers.
  5. 5. Availability of alternative credit models.

Conclusion

Digital lending companies (FinTech) are helping start-ups and existing businesses to avail funding in a transparent and easier way. FinTechs are going to revolutionize all the areas in banking and financial services segment. Through their offerings, finance raising experience will be more personalized and empowering. The convergence of Fintech, Banks & other Stakeholders of the financial sector will build a strong digital platform for India’s digital transformation.

The basic idea is to have a platform that will provide quick and hassle-free business loans. CapitaWorld is the answer to all questions, which are posed by all MSMEs in India. It is armed with data, algorithms, analytics, and technology.

If you need funds for your business, then please talk to us. We have got the team of financial experts, who will resolve all your queries instantly. For more information, you can call us at 95120-15768 or write an email to info@capitaworld.com


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