3 ways in which NBFCs are making finance more inclusive in India
Mid and low-income groups who are new to credit and institutional banking are a vital cog in the country’s mission to become a 5 trillion dollar economy. The rise of this Emerging India means more diversity. Of needs, choices, and offerings. New-age NBFCs are at the center of serving them by introducing new operating models that bring the best of both worlds to these hitherto unserved but ever-expanding customer bases. They are joining the forces of impeccable technology with conventional credit features to build an agreeable, accessible, and affordable lending ecosystem.
However, there are many more miles yet to be covered. Despite heavy investments on part of NBFCs to accelerate adoption among remote customers, the ill availability of easy-to-access credit continues to pose a significant obstacle to the growth and empowerment of this customer base. Most of Emerging India is still struggling to secure loans due to its inability to fulfill collateral, paperwork, and credit history-related obligations. This also means they are unable to put together a credit footprint that showcases their repayment capabilities.
Bridging the seemingly invisible gaps
Traditional banking institutions have categorically excluded this customer segment from their products and services owing to the limitations that have already been elaborated on above. This has created gaps in the Indian financial ecosystem, which NBFCs have taken upon themselves to address. The digital and tech-enabled services of NBFCs make use of more than formal datasets to create customer personas. Online services mean everyone with a smartphone in India can access these services.
Digital lending companies like SmartCoin Financials, for example, are partnering with customers across their financial lifecycles. This they are enabling by not only extending easy credit to the customers but also offering savings and non-lending products, such as digital gold, and credit score tracking, among others to refine their personal financial standing.
Furthering and financing small-ticket dreams
One of the key differences between the sectors served by the traditionalist banking institutions and the unserved ones is that the latter often require credit access for their day-to-day financial shenanigans. These requirements are often small-ticket ones compared to the credit requirements of the top 5%. Taking into account their minimal requirements, next-generation NBFCs are continually grabbing market share by enabling small-ticket loans.
By way of a robust technology infrastructure, they are also able to address the immediate and emergency needs of their customers. Significantly faster loan approvals, with the end-to-end process from application to disbursal taking less than a day in some cases, is a welcome change for the sector. The agility they have brought into the ecosystem is expected to soon become one of the key considerations among customers while choosing players in the industry.
Reaching the length and breadth of India. All day and every day.
Emergencies don’t come knocking, which means the financial sector needs to be there when the customer comes seeking immediate help. NBFCs offer digital financial services, which are accessible 24×7, no matter what time of the day it is. Their credit assistance is flexible, efficient, and accelerated. A significantly astute workforce is also helping these NBFCs, which means they are more in touch with the diversity of needs exhibited by this customer segment.
They are reaching out to the microcosms across the nooks of the country to include the 300 M+ credit-starved potential customers of India who have been deprived of formal financial assistance.