Payday advance loans are not well regulated

The biggest challenge for the concept of payday advance loan in India is that it is not regulated adequately, and hence is prone to misuse by those who avail of these loans as well as those who operate these services. Quite a few online service providers have come up in the last couple of years. The model is lucrative for youngsters and, with increasing penetration of mobile phone usage, demand is likely to grow – it is a matter of time that it shall catch the attention of the financial regulators, and hence operators need to be prepared. Ensuring the recovery of loans, especially those offering retail services, could be an uphill task. However, it would be a tad less tedious if one can strike an understanding with the employers directly.