The story of Fintech evolution in India is the best example to understand what a technologically advanced financial infrastructure can do to elevate the economic graph of any nation. The businesses earlier had the only option of funding through the traditional loan approval system even if they required urgent loans. It has included multiple visits to the banking outlets and a prolonged waiting period for final approval after serious scrutiny of the borrower’s valid documents and financial history.
Ever since, the finance industry has entered into a full-fledged digital space. The process of loan application and funding approval has been reduced to tapping and swiping on smartphones because they can choose an easy loan app from the plethora of online applications. Such financial ease of getting funds in flexible EMI options has empowered budding entrepreneurs and start-up owners to dream big because they can conveniently avail microloans to establish, scale up and run their businesses smoothly.
How has Fintech’s evolution changed the story for micro-entrepreneurs?
In the past few decades, medium and small enterprises dealt with arduous issues even for the application and approval of small loans. They were charged with steep pre-closure charges, high processing fees, delays in disbursement, lock-in periods, etc. Fortunately, these issues are a thing of the past because fintech firms constantly offer innovative and practical solutions to entrepreneurs and potential investors.
A small business owner who recently started needs capital funding to escalate the business because it is already gaining traction. So, the entrepreneur can easily avail of quick financing of a few lakhs to rent a bigger space, add the working staff or transcend into the digital space to sell the product or service online and enable the online transaction of payments. This is possible because the instant cash loan app can provide a straightforward online process.
Thanks to the 2017 regulation of P2P lending by the Reserve Bank Of India, new fintech firms have disrupted the set protocol. They are offering avenues for easily accessible money loan app can offer. This has given millions of business owners in the country the courage to start new ventures or scale up their enterprises through the quick financial aid they can receive now. Which otherwise was a cumbersome process and required a lot of physical documentation.
If we have to summarize the benefits of digital lending systems for MSMEs, then we can list down the following pointers:
- The entire funding process is carried out digitally, be it credit check, documentation, etc., which means borrowers can apply for instant loans anytime and anywhere from their mobile devices connected to the internet.
- The prevalence of digital lending models and the inclination of business firms towards it has built pressure for substantial improvement on the existing model of the conventional lending system.
- The MSME borrowers have the liberty to send loan proposals to multiple senders at a given point in time and the turnaround time is also reduced.
Thus, various government initiatives have also played an essential role in improving the credit process for small and medium enterprises. With the intelligent use of technology, financial institutions can perform risk profiling better, creating a business-friendly environment for borrowers and lenders.