CXOTi day has engaged in an exclusive interview with Mr. Aalesh Avlani Founder, Credit Wise Capital.
- How will digital lending evolve in 2023 and what implications will it have for the fintech industry?
- Digital lending has already grown rapidly in India and is likely to continue in 2023. With the increasing use of digital payments, the rise of digital banking and the availability of big data analytics, digital lending is expected to become even more efficient and accessible.
- One trend that is likely to continue is the rise of two-wheeler financing platforms. The two-wheeler finance market in India has grown consistently over the past few years due to increasing demand for two-wheelers, especially in rural and semi-urban areas. The trend is expected to continue in 2023, with a growing demand for two-wheeler financing options. India has a growing middle class with high disposable income and growing aspirations, which will lead to increased demand for two-wheelers.
- Another trend that may emerge in digital lending is the use of blockchain technology. Blockchain has the potential to reduce the risk of fraud and increase transparency in lending transactions. It can also provide an opportunity for safer and more efficient transfer of funds between lenders and borrowers.
- With the growth of digital lending, traditional banks may face increased competition from fintech companies. FinTech can leverage technology to offer faster and more personalized lending services, and they can also be more nimble and innovative than banks. Fintechs, however, also face regulatory challenges and the need to build trust and credibility with customers.
- Overall, digital lending is expected to continue its growth trajectory in India in 2023. While this presents opportunities for fintech companies, it also presents challenges such as the need for effective risk management and regulation.
- In what ways has digital lending simplified the process of getting a two-wheeler loan:
Digital lending has revolutionized the process of getting a two-wheeler loan by simplifying it in several ways:
- Practical and fast application process: With digital lending, borrowers can apply for a two-wheeler loan online from their home or office. The process is simple and the application can be completed within minutes.
- Paperless process: Digital lending eliminates the need for physical documents and paperwork. Borrowers can submit all their documents online and the entire process can be completed electronically, making it faster and more convenient.
- Faster processing: Digital lenders use advanced algorithms to process loan applications quickly. The loan approval process can be completed within minutes and funds can be disbursed into the borrower’s account within hours.
- Real-time loan tracking: Borrowers can track their loan application status and get real-time updates on the loan approval process through the lender’s digital platform.
- Competitive interest rates: Digital lenders offer competitive interest rates on two-wheeler loans. Borrowers can compare rates from different lenders online and choose the best option for their needs.
- Flexible repayment options: Digital lenders offer flexible repayment options, including online payment options, automatic debits and pre-approved payments, making it easier for borrowers to repay their loans.
Overall, digital lending has made the process of getting two-wheeler loans easier, faster and more convenient for borrowers.
- What methods are fintech lenders using to reach customers in smaller cities in India and can you provide some examples?
Fintech lenders are using various methods to reach customers in smaller cities in India. Here are some of the popular methods:
- Digital marketing: Fintech lenders are leveraging digital marketing channels like social media, search engines and email to reach customers in smaller cities in India. They use targeted advertising campaigns to reach potential customers in specific locations.
- Mobile apps: Fintech lenders have developed easy-to-use mobile apps that can be downloaded onto smartphones. These apps allow customers to apply for loans, track their applications and make repayments from their mobile devices.
- Partnerships with local sellers: Fintech lenders partner with local merchants such as grocery stores, pharmacies and gas stations to promote their services. These merchants act as agents and can help customers in smaller towns apply for loans and complete the necessary paperwork.
- Micro ATMs: Fintech lenders are installing micro-ATMs in smaller towns to provide easy access to cash. These ATMs are small and portable and can be used to withdraw cash or make deposits.
- Referral programs: Fintech lenders encourage existing customers to refer friends and family members to their services. They offer cash rewards or discounts on interest to customers who successfully refer new customers.
- Overall, fintech lenders are using a combination of technology and local partnerships to reach customers in smaller cities in India. These efforts help increase financial inclusion and provide access to credit to those who may have been excluded from traditional banking services
Examples:
- Credit Wise Capital: CWC, a non-banking financial company (NBFC) in India offering two-wheeler loans through WhatsApp chatbot in 5 different languages which include Hindi, Marathi, Kannada, Gujarati, English and also first in the two-wheeler industry to use Account Aggregator (AA) to get customer bank details on the web and Prosperity Score that uses satellite imagery to provide customers’ location scores for better assurance. Through this multilingual chatbot and using alternative data like AA and Prosperity Score, CWC is targeting tier 2, 3 and 4 cities in India and helping customers in smaller cities who are new to credit to get two wheeler loans.
- Paytm: Paytm, a popular fintech company in India, has partnered with local merchants such as milk stalls, newspaper vendors and small shops to market its financial services. These merchants act as agents and help customers in smaller towns open digital savings accounts, apply for loans and make digital payments using Paytm’s mobile app.
- Lending map: Lendingkart, an online lending platform for small businesses, has developed a mobile app that allows customers to apply for loans and track their applications from their smartphone. The company has also partnered with local associations of small businesses in smaller towns to market its services.
- Identification: Indifi, an online lending platform for small businesses in India, has developed a referral program that encourages existing customers to refer friends and family members to its services. The company offers cash rewards or discounts on interest to customers who successfully refer new customers. This has helped Indifi expand its customer base in smaller cities.
- What significant changes and advances can we expect in the financial sector with the rise of fintech in 2023?
Some potential changes and advancements that could happen in the financial sector with the rise of fintech in 2023:
- Increased use of digital payments: With the ongoing push towards a cashless economy, fintechs are driving the adoption of digital payments in India. In 2023, we could see further growth in the number of digital payments, as well as the introduction of more innovative payment solutions.
- Expansion of credit access: Fintechs leverage technology to offer credit to underserved segments of the population in India. In 2023, we could see more fintechs entering the lending area, as well as greater collaboration between fintechs and traditional financial institutions to expand access to credit in the country.
- Greater emphasis on financial inclusion: Fintechs play a key role in promoting financial inclusion in India, especially in rural areas. By 2023, we could see more fintechs focusing on providing financial services to underserved populations, as well as more partnerships between fintechs and government initiatives to drive financial inclusion.
- Advances in AI and Machine Learning: Fintechs use AI and machine learning to offer personalized financial advice and services to clients. By 2023, we could see further advancements in these technologies, as well as greater integration of AI and machine learning into financial services across the industry.
- How will the growth of specialized fintech solutions promote financial inclusion and attract more users?
The growth of specialized fintech solutions can promote financial inclusion and attract more users in India in several ways:
- To provide access to financial services: Specialized fintech solutions can offer customized financial products and services that cater to the specific needs of underserved segments of the population in India. Fintechs can, for example, offer microloans to small businesses, insurance products to farmers or digital savings accounts to low-income households. By providing access to these financial services, fintech can promote financial inclusion and attract more users.
- Reduce the cost of financial services: Fintechs leverage technology to reduce the cost of providing financial services, which can make them more affordable and accessible to a wider range of users. Digital loan platforms can, for example, offer loans at lower interest rates than traditional lenders, while digital payment solutions can eliminate the need for cash transactions, which can be costly and impractical.
- Offers practical and user-friendly solutions: Fintechs develop user-friendly interfaces and mobile apps that make it easy for users to access and use financial services. This could be particularly attractive to users in India who may not have access to traditional banking services or who may be intimidated by complex financial products.
- Utilize alternative data sources: Fintechs use alternative data sources, such as mobile phone usage or social media activity, to assess the creditworthiness of users who may not have a formal credit history. This can help fintechs offer credit to users who may have been excluded from traditional credit markets, promoting financial inclusion.
Overall, the growth of specialized fintech solutions in India can help promote financial inclusion and attract more users by offering affordable,
