Fintech Is Changing The Way Personal Finance Works In India

With the democratization of technology, the idea of giving access to financial products, creating a trusted last mile utility as well as providing universal access to it seems to be no longer a far-fetched idea. There has been a proliferation of start-ups and lending companies, built on an easy to use and high technology framework and is proffering the borrowers with easy access to financial products like Mutual Funds, Term Insurance and Loans.

These firms are cutting down on the middlemen, and selling these utilities on a no-commission basis & providing unbiased advice to the clients. That’s what exactly does the Delhi-based Lendbox. The peer to peer lending platform matches borrowers with individual money lenders according to their risk apetite and credit assessment allowing borrowers to get instant personal loan while lenders can multiply their savings online.

The hi-tech facilities and rise of smartphones have also enabled some start-ups to make investment a simpler process for customers. App and web-based investment management firm, Tavaga, has enabled the retail investors to access technology, processes, and advice and investment products by offering a personalized, innovative technology interface between the two. Other online mutual funds investment platforms which have been providing easy one-click method of investing to its customers are Scripbox, RKSV and Zerodha.

The smartphones and other gadgets have not only made credit available to the borrower easier but have also allowed the customers to escape a few desks, grumpy faces, jumbled up forms and a security guard helping students to find the 'demand draft guy'.

Cash deposits are now being done on swanky machines at bank branches and monetary transfers are easily carried out through mobile apps. Also, hundreds of pages giving advice on right loan plans and insurance policies are just a click away.

Meanwhile, offering lucrative short-term loans, the increasing numbers of e-lending start-ups have become a promising alternative for the students planning for further studies and the Small Medium Enterprises (SMEs) who find it difficult to access loans through traditional banks. These alternative lending companies have been wooing customers with small personal loans by making credit available to them at a lower interest rate compared to the traditional lenders in just 24 to 48 hours and without assessing their credit risk profile.

India’s largest e-commerce firms Flipkart, Snapdeal and Amazon India are also providing instant loan facility to empower the small and medium sellers and entrepreneurs. Paytm, India’s mobile payment and commerce platform has also entered into partnership with Lendingkart to offer collateral free business loans to SME’s.