Appy Lending
Increasingly, this is a scenario being played out across the country. In spite of the large number of financial institutions and banks present across the country, access to financial services has been a huge challenge for a majority of the population.

- Jun 30, 2016,
- Updated Jul 4, 2016 1:16 PM IST
Shiva Kumar is a cheerful 24-year-old accountant, who works for a rice merchant in the narrow congested lanes of Balepete in old Bengaluru. A first-generation graduate, Kumar hails from Yadiyur, located 100 kilometres north-west of the state capital.
Kumar quickly realised that living in a city like Bengaluru on his Rs 22,000-amonth salary left him with only limited savings, in spite of his frugal habits. Indeed, when his mother fell sick and needed Rs 10,000 for treatment, Kumar faced a dilemma. His merchant boss refused to lend him money again, having helped him out once earlier. If only he could get a loan, Kumar was confident that he could repay it within a month or two.
"When I approached a nationalised bank where I had opened an account, they asked me for a salary certificate, income-tax returns and a guarantor as it was a personal loan. Where will I provide all that? I work for a rice trader and I am new to the city. The only option was to approach a moneylender. That is when my smartphone came to use, as a friend told me about an app called EarlySalary.com," says Kumar.
Initially sceptical, he applied online on the app with details like his Aadhaar card and bank statement showing salary being credited regularly as well as other sundry details. Within a day, his application was approved and the small loan was transferred to his bank. EarlySalary.com had looked at all details, including his Facebook account, and determined that he was creditworthy. Kumar repaid the loan within 28 days and is now a borrower in good standing. "It was a godsend for me as I needed the money urgently'
While a few like Capital Float and CASHe have registered NBFCs, others say that there are no regulatory requirements for this app-based online lending models. Shankar of i-Lend says, "RBI I think has till now deliberately opted for light touch regulation so as not to stifle innovation in the fintech lending space. Voluntary regulation like putting a cap on interest rates, doing KYC and following industry norms will lead to healthy growth for the sector."
But this sector will have to guard against going down the microfinance route, which initially promised much but was later seen to have issues such as poor governance, lack of transparency, coercive recovery practices and high rates of interest. For now, though, it seems to have caught the imagination of entrepreneurs, borrowers and lenders.
So next time you need a loan, all you need to do is download an app and apply.
Shiva Kumar is a cheerful 24-year-old accountant, who works for a rice merchant in the narrow congested lanes of Balepete in old Bengaluru. A first-generation graduate, Kumar hails from Yadiyur, located 100 kilometres north-west of the state capital.
Kumar quickly realised that living in a city like Bengaluru on his Rs 22,000-amonth salary left him with only limited savings, in spite of his frugal habits. Indeed, when his mother fell sick and needed Rs 10,000 for treatment, Kumar faced a dilemma. His merchant boss refused to lend him money again, having helped him out once earlier. If only he could get a loan, Kumar was confident that he could repay it within a month or two.
"When I approached a nationalised bank where I had opened an account, they asked me for a salary certificate, income-tax returns and a guarantor as it was a personal loan. Where will I provide all that? I work for a rice trader and I am new to the city. The only option was to approach a moneylender. That is when my smartphone came to use, as a friend told me about an app called EarlySalary.com," says Kumar.
Initially sceptical, he applied online on the app with details like his Aadhaar card and bank statement showing salary being credited regularly as well as other sundry details. Within a day, his application was approved and the small loan was transferred to his bank. EarlySalary.com had looked at all details, including his Facebook account, and determined that he was creditworthy. Kumar repaid the loan within 28 days and is now a borrower in good standing. "It was a godsend for me as I needed the money urgently'
While a few like Capital Float and CASHe have registered NBFCs, others say that there are no regulatory requirements for this app-based online lending models. Shankar of i-Lend says, "RBI I think has till now deliberately opted for light touch regulation so as not to stifle innovation in the fintech lending space. Voluntary regulation like putting a cap on interest rates, doing KYC and following industry norms will lead to healthy growth for the sector."
But this sector will have to guard against going down the microfinance route, which initially promised much but was later seen to have issues such as poor governance, lack of transparency, coercive recovery practices and high rates of interest. For now, though, it seems to have caught the imagination of entrepreneurs, borrowers and lenders.
So next time you need a loan, all you need to do is download an app and apply.