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Internet and Technology - probably the two best things that happened to mankind - creating opportunities for some, making life easier for others. Considering that we are an integral part of the money-making industry, there is always a need in people for more funds. While most people would use digital platforms to shop and access day-to-day services, they can also help you address the issue of urgent money. Digital lending is on a rise in India and according to a joint study by Omidyar Network and Boston Consulting Group (BCG), digital lending to micro, small and medium enterprises (MSME) in the country can grow up to Rs 7 lakh crore by 2023, a 15x increase in annual disbursements.
More and more individuals are also getting inclusive about digital lending, often using them to meet immediate fund requirements. Amit Tiwari, Chief Operating Officer, Loan Tap told Zee Business TV that most of our tasks have moved online. "Even if you wake up in the morning and find there are no tea leaves at home, you order them online through an app. When you are leaving for office, you book a cab online and even when you have to pay that driver, you probably do it through a digital mode of payment," he said, while explaining how internet has changed our lives.
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"Over the last two-three years, technology has entered in most areas of our life. This also has to do with the fact that internet has become cheaper and is more accessible to people," Tiwari added.
Why digital lending is becoming popular?
Tiwari believes that the current generation prefers to get all the services delivered at their footsteps. This is why more youngsters are opting for online loans. "A major part of India's current workforce is young. Unlike the previous generations, they don't want to go banks, stand in queues and then, get the loan. Instead, they opt for convenience and want loans to be approved online. They also expect similar type of customer service. For example, if they drop a message on Facebook, they expect the lender to solve their problem and help them with loan," he said.
"Digital lending is more popular among youngsters but even people in their 40s are digitally active and use these services," Tiwari added.
Why this rise?
Most banks and non-banking financial companies (NBFCs) have rigid guidelines to approve loans. This makes most borrowers ineligible to get loans. In these situations, digital lenders come to their rescue, filling the void to acquire a large customer base. Digital lenders do not need a physical branch network as all operational functions are done digitally over the internet and therefore they are able to keep their fixed costs lower. This benefit is passed on the customer.