The adoption of fintech in India has increased significantly over the past few years. It is certainly one of the fastest-growing sectors of the country which has led to a rise in the number of digital lending platforms. The value of the fintech sector is expected to reach $350 million in the coming two years. Digital lending uses financial technologies to digitize the application procedure of business loan. This includes lending through mobile-based applications and online platforms. Let us take a look at how fintech is transforming the digital lending services in the country.
Smooth underwriting process
Traditional lending institutions like banks are still dependent on their employees to carry out the underwriting process of the loan. The same employee then accesses the risk profile of the borrowers. But fintech solution providers have transformed this process. This entire process has become less tedious due to automation. The role of cloud computing is crucial here. It has helped streamline the business loan approval process. With a quick collection of data and unlimited cloud storage, the process of underwriting is smooth and simplified.
Quick availability of funds
A major benefit for borrowers is the quick and convenient availability of funds from fintech providers. Companies have accelerated the loan disbursal procedure and it is now faster than ever.
Better utilization of data
Fintech allows lenders in the country to use an alternative data scoring system that is highly advanced and much more efficient. A lot of traditional lenders reject the loan application because they do not have access to the credit score of the applicants. Fintech solution providers assess the digital footprints and evaluate the credit score. This helps establish a strong and comprehensive credit scoring system in place.
Better security system
With the use of advanced technology, fintech ensures that your financial information is safe at all times. The companies can view your information but they cannot store the data. Hence, there is no possibility of them using the data for any inappropriate purpose.
Enhanced product offering
You enjoy financial assistance in different forms that allows you to fulfill your needs. Besides business loans, fintech companies offer MSME loans, car loans, personal loans, and more. The enhanced product offering will ensure that you choose the right loan product for your needs.
Better lending models
Fintech companies in the country have a unique business model and they engage in peer-to-peer lending. This ensures that the lenders earn interest by providing assistance to those who are in need of funds. The company will charge a fee for the platform that helps connect the borrowers and lenders.
The growth of fintech companies has led to a revolution in digital lending services across the country. It allows entrepreneurs to gain access to business loans in an easy and convenient manner. The companies continue to evolve and there is no doubt that they will become the most preferred choice of borrowing in the near future. Fintech companies are giving strong competition to the traditional lenders in the country and they have made a mark in the sector.