How technology is powering digital lending in India
Conventional lending channels require formal documents such as credit score, bank statements, tax returns for credit risk assessment, and loan disbursal. In the absence of documentation, they either provide credit at very high interest rates or require adequate collateral, putting fledgling businesses at a disadvantage. To serve these customers, lenders must look beyond standard documentation and consider their digital footprints.
Optical character recognition (OCR) technology helps APIs scan and read identity documents like Aadhar, PAN card and extract data digitally, reducing the probability of human error and saving time.
eNACH (Electronic National Automated Clearing House), a system introduced by the NPCI, helps lenders automatically receive recurring payments from borrowers, faster and without requiring paperwork and manual interventions.
Geography is increasingly becoming less of a hindrance as borrowers can receive capital right at their fingertips, from the comforts of their homes without arduous paperwork, long waiting hours, and uncertainties.
#fintech #microfinance #p2plending #digitization #technologyinnovation
