Peo­ple in Ru­ral, Semi-ur­ban In­dia Board Un­se­cured Per­sonal Loan Band­wagon

On­line mar­ket­places are pro­vid­ing ac­cess to lend­ing prod­ucts pre­vi­ously un­avail­able

The Economic Times - - Finance & Commodities - Pratik.Bhakta@ times­

Mum­bai: Pro­lif­er­a­tion in smart­phones and deeper pen­e­tra­tion of In­ter­net have en­cour­aged peo­ple in ru­ral and semi ur­ban In­dia to jump onto the un­se­cured per­sonal loan band­wagon, and they are us­ing the ser­vices of on­line mar­ket­places to ac­cess the lend­ing prod­ucts of banks that were not avail­able to them ear­lier.

On­line marketplace Pais­abazaar dis­burses .₹ 220 crore of unse- cured per­sonal loans per month, spread across 90 lo­ca­tions over tier-1 to 5 cities.

“We are see­ing a strong traf­fic from smaller towns like Jhar­sug­uda, Ko­hima, Ranchi and Salem and are getting around 27% of our en­quiries orig­i­nat­ing from smaller cities and towns,” said Gau­rav Ag­gar­wal, as­so­ciate di­rec­tor at Pais­abazaar.

Pais­abazaar, a marketplace for all kinds of credit prod­ucts start­ing from credit cards to home loans, has dis­bursed about .₹ 2,500 crore through its plat­form in 2016-17.

“We see an av­er­age loan size of .₹ 3.7 lakh and the in­ter­est rate hov­ers be­tween 11% and 24% per an­num,” said Ag­gar­wal.

While lend­ing mar­ket­places are see­ing a strong trac­tion in credit de­mand from be­yond the ma­jor cities, the ma- in prob­lem lies in the re­quire­ment of pa­per doc­u­men­ta­tion for fi­nal dis­bur­sal of loans.

“We are see­ing in­creased trac­tion from ru­ral In­dia with the pen­e­tra­tion of smart­phones and in­ter­net, but lend­ing prod­ucts can only reach the hin­ter­land dig­i­tally if de­liv­ery mech­a­nism be­comes pa­per­less,” said Ad­hil Shetty, chief ex­ec­u­tive of­fi­cer of Bankbazaar, an­other on­line marketplace for lend­ing prod­ucts.

With ef­forts go­ing on for im­ple- men­ta­tion of Aad­haar-based au­then­ti­ca­tion and e-KYC, banks can scale up and ac­quire more bor­row­ers from across the ru­ral hin­ter­land and lend­ing mar­ket­places can play a piv­otal role in ac­quir­ing cus­tomers. “Banks which en­cour­age pa­per­less bank­ing, like DBS, Ko­tak Mahin­dra Bank’s 811 prod­uct and IDFC Bank, we are in a po­si­tion to meet the grow­ing de­mand for at­trac­tive credit prod­ucts from th­ese lo­ca­tions,” said Shetty.

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