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Financial inclusion is the basis on which a country can reduce poverty, generate employment, and uplift all sections of society.
Unfortunately, not all places in India enjoy access to banking and financial services. In some places, it’s hard to spot a bank for hundreds of kilometres forget availing credit cards or personal loan offerings.
When people are able to access financial and banking services, they are not only able to park their money in a savings account and earn interest on it, but they can also access credit which can help them fulfil their needs such as education, marriage, setting up a business, etc.
For these small and medium-sized enterprises, quick access to funds is crucial for survival. That is the reason why private or other public sector banks depend on digital lending; they understand its power for their customers and for the economy.
To explain better, we have listed a few ways in which digital lending re-energises Indian economy:
Digital lending can reach the length and breadth of India’s boundaries. All one needs is a smartphone or a computer with an internet connection to open a current or savings account, access business or personal loans, and that too in quick time. Digital reduces the need for physical visits to a bank’s branch, which for many people would mean a journey of hours.
The biggest benefit of digital lending is the speedier approval of loans. From verification and approval of documents to disbursal of the loan amount, the turnaround time with digital lending is far less than traditional loan processes where even a basic personal loan would take weeks to see approval. This helps businesses take bolder decisions because they know approval and access to credit is quicker.
Digital lender’s ability to reach all of India’s pin codes means banks, fintech operators, and IT companies will have enough motivation to improve India’s technological infrastructure so that everyone gets an opportunity to access credit online. This helps boosts employment which is beneficial for the Indian economy.
When more people use digital lending as their primary means to access credit, it encourages lenders to innovate their offerings. A lender may decide to not just offer credit online but let its customer compare credit cards or let them pay the card’s bill on its portal. This ensures customers can avail different banking or financial services from one single place than having to download multiple apps.
When lenders can reach customers digitally, it means they are able to save money on office premises or equipment. They can use the saved money to offer their customers better loan deals, charge lower rates of interest, offer other services such as loan/credit card repayment portals, wallet services, etc.
Overall, it introduces a whole new world of opportunities and possibilities to people who dream big.
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