The Digital Revolution has changed the order of things in all sectors and industries, and Financial Services are no exclusion to this advancement. FinTech- the popular term for Financial Technology- has carved a path for digital lending which traditional banks do not commonly tread. Not commonly treaded by traditional banks and forayed into the business of digital lending.
The Indian market is also rapidly filling with online lending platforms, providing easy credit for personal use as well as B2B financing. As such, the digital lending sector in the country is expected to be valued at an approximate of $350 billion in 2023. FinTech-driven digital lending services have been credited for solving many infrastructural and inclusivity challenges that conventional financial institutions have failed to resolve.
Despite the relatively high interest rates and the inescapable risk of encountering fraudulent sources on the net, Fintech-driven digital lending facilities are largely hailed as a boon to financial services. For instance, when the Covid-19 pandemic restricted brick-and-mortar transactions, FinTech came to the rescue of the masses. As businesses became bound to operate online, digital lending facilities rose in popularity.
FinTech has enabled a digitalization of the entire loan process, from application to assessment to disbursal. Besides reducing overall turnaround time, facilities to avail real-time e-KYCs help in customer authentication, and the use of latest technologies in AI and data analytics helps in accurate evaluation of creditworthiness and required loan amount, especially in the case of B2B financing.
FinTech has also saved many from falling prey to loan sharks as clients who are refused credit from traditional sources like banks, due to lack of collateral or low credit score, now have the option to resort to digital lending facilities. The presence of online B2B payment platforms is thus bridging the credit gap in countries like India by building a robust digital lending ecosystem.
Besides making lending inclusive and accessible for the general public, the customer-oriented digital lending model has also served as a boon for those on the other side of the market. Advancements in FinTech have blessed digital lenders with the resources to assess risks by analyzing consumer behavior, detect potential frauds, identify repetitive defaulters, and much more.
Thus, FinTech-driven digital lending facilities are increasingly overshadowing conventional financial institutions like banks in the loan market. Approved by the government, regulated by the RBI and readily accepted by the people at large, FinTech has revolutionized the lending landscape in India and it is safe to say that digital lending is here to stay. Embifi is a digital B2B payment platform of Indian origin, designed to provide easy credit solutions to SMEs in particular. To know more about their services, get in touch with the team at Embifi.