Digital lending: Now more than ever we need fintechs to democratise credit, uplift livelihoods
The digital innovation India has made so far is here to stay. It needs adoption into commercial application to deepen the financial inclusion net
- Jan 17, 2021,
- Updated Jan 17, 2021 12:37 PM IST
The Bill & Melinda Gates Foundation's annual report 2019 titled "Goalkeepers: Examining Inequality", tracked the global progress in meeting the UN's Sustainable Development Goals (SDGs) by 2030. It mentioned that "geography and gender are the biggest drivers of inequality, which can be addressed with smart policies built around digital technology that improves both the quality and reach of government services".
The report also showcased the wonderful architecture that India has put together - the "JAM trinity" - 'Jan Dhan Yojana' to open bank accounts for the underprivileged, 'Aadhaar' to provide every Indian with a biometric-authenticated unique identity number, and mobile phones that enabled and increased the reach of services. Pradhan Mantri Jan-Dhan Yojana is India's National Mission for Financial Inclusion to ensure access to financial services, namely banking savings and deposit accounts, remittance, credit, insurance, and pension in an affordable manner. The scheme has over 40 crore beneficiaries so far. It also uses the services of over 1.2 lakh "Bank-Mitras" delivering branchless banking services.
The digital innovation India has made so far is here to stay. It needs adoption into commercial application to deepen the financial inclusion net. This is probably the lowest per unit cost of innovation globally, and can change our current status around "unbanked" and "under-banked".
The lending industry, along with the digital platforms need to work with our regulators to ensure that consumers are not victimised by nefarious players. At the same time, such sporadic incidents should not be an excuse for slowing down the growth of digital finance.
Statistically, there have been a greater number of incidents in the formal finance sector that have hurt consumers than the anecdotal cases around digital finance so far. So, let's not besmirch the digital sector.
As we encourage consumers to go digital, we need to strengthen their belief in grievance redressal. The surest form of consumer confidence is when they come forward with complaints with the assurance that it would be redressed within a certain time period.
(Srinath Sridharan, Independent markets commentator and Member of Governance Council for FACE & Akshay Mehrotra, Fintech entrepreneur, Co-Founder & CEO of EarlySalary and Co-Founder of FACE (FinTech Association for Consumer Empowerment.)
The Bill & Melinda Gates Foundation's annual report 2019 titled "Goalkeepers: Examining Inequality", tracked the global progress in meeting the UN's Sustainable Development Goals (SDGs) by 2030. It mentioned that "geography and gender are the biggest drivers of inequality, which can be addressed with smart policies built around digital technology that improves both the quality and reach of government services".
The report also showcased the wonderful architecture that India has put together - the "JAM trinity" - 'Jan Dhan Yojana' to open bank accounts for the underprivileged, 'Aadhaar' to provide every Indian with a biometric-authenticated unique identity number, and mobile phones that enabled and increased the reach of services. Pradhan Mantri Jan-Dhan Yojana is India's National Mission for Financial Inclusion to ensure access to financial services, namely banking savings and deposit accounts, remittance, credit, insurance, and pension in an affordable manner. The scheme has over 40 crore beneficiaries so far. It also uses the services of over 1.2 lakh "Bank-Mitras" delivering branchless banking services.
The digital innovation India has made so far is here to stay. It needs adoption into commercial application to deepen the financial inclusion net. This is probably the lowest per unit cost of innovation globally, and can change our current status around "unbanked" and "under-banked".
The lending industry, along with the digital platforms need to work with our regulators to ensure that consumers are not victimised by nefarious players. At the same time, such sporadic incidents should not be an excuse for slowing down the growth of digital finance.
Statistically, there have been a greater number of incidents in the formal finance sector that have hurt consumers than the anecdotal cases around digital finance so far. So, let's not besmirch the digital sector.
As we encourage consumers to go digital, we need to strengthen their belief in grievance redressal. The surest form of consumer confidence is when they come forward with complaints with the assurance that it would be redressed within a certain time period.
(Srinath Sridharan, Independent markets commentator and Member of Governance Council for FACE & Akshay Mehrotra, Fintech entrepreneur, Co-Founder & CEO of EarlySalary and Co-Founder of FACE (FinTech Association for Consumer Empowerment.)