According to RBI, the latest credit growth data, personal loans have increased at the fastest rate among all loan categories in the past one year. Startups are getting popular as they have innovative solutions to the problems people face. In a country where getting a personal loan had a robust process, things are getting better as both banks and entrepreneurs are working hard to provide the better solutions.
Payday loans are a relatively new concept in our country. These loans are also known as an instant cash loan or a salary advance loan in India. Within a passage of a very short period of time, a lot of apps are suddenly offering personal loans and some don’t even ask for anything for security amount from the borrowers. Expected to cross over $2.4 Billion by 2020, India has more 500 Fintech startups.
Easy process
Banks were keeping millions of loan seekers away from getting their applications approved. A large number of Indians apply for loans to meet their financial emergency, but fail to qualify. However, at the same time, money lending apps are helping a big section of society to get loans.
These follow a paperless documentation and verification process is very quick. You can easily submit the soft copy of your document and get them verified in minutes only. Most of these startups, target customers who don’t have any credit history, and to evaluate the borrower’s profile, they use a variety of parameters like applicant’s bank account statement to evaluate the spending habit.
Why FinTech is Booming
India has a great market potential in this industry, Internet and smartphones have helped automated and efficient financial services solutions to grow but the main reason for this rise was demonetization. Growth in this sector came because of the increased availability of customer data, faster disbursements driven by technology, and lower interest rates in some segments.
FinTech startups focus on low-cost, high-tech models to deal with low-value, high-volume financial customers which are in mass number in India.
FinTech is a booming segment in India with the opening of mobile wallet companies, non-banking financing companies and payments banks. The industry is even creating a lot of new jobs for professionals having skills of mobile app development, user experience and financial analysis
