People in Rural, Semi-urban India Board Unsecured Personal Loan Bandwagon
Online marketplaces are providing access to lending products previously unavailable
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.