Lending - NewNerve

6May

By Ankit1 Comment

BFSI, Blog, Fintech, Microfinance

Financial Inclusion Initiatives with Fintech Collaboration in India

The Indian government and regulators have actively collaborated with Fintech companies to promote financial inclusion, reaching underserved populations and providing access to essential financial services. Let's explore some specific initiatives: 1. PMJDY (Pradhan Mantri Jan Dhan Yojana): This government-led initiative aimed to provide universal access to banking services by opening bank accounts for the unbanked population. Fintech companies played a crucial role in enabling account opening through mobile wallets and online platforms, reaching remote areas and simplifying the process. 2. Aadhaar Enabled Payment System (AEPS): AEPS allows individuals to use their Aadhaar biometric authentication to access their bank accounts and make financial transactions. Fintech companies...

BCs (Business Correspondents) and Fintech Collaborations, 2024

4May

By Ankit3 Comments

BFSI, Blog, Microfinance

BCs (Business Correspondents) and Fintech Collaborations, 2024

Benefits of Fintech-BC (Business Correspondents) Collaborations for Underserved Communities The collaboration between fintech companies and BCs (Business Correspondents) has significantly benefited underserved communities in India by expanding access to financial services, promoting financial inclusion, and empowering individuals and communities. Let's explore the key benefits of these partnerships: 1. Increased Financial Access: Fintech-BC collaborations have extended the reach of financial services to remote and underserved areas, bridging the geographical gap and bringing financial products closer to the unbanked population. This has enabled individuals to open bank accounts, access micro-loans, micro-insurance, and other essential financial services, empowering ...

4May

By AnkitNo Comments

BFSI, Blog, Fintech, Microfinance

Fintech-BC Collaboration: Driving Innovation in Financial Inclusion

Fintech companies are actively collaborating with BCs to offer innovative financial products and services, expanding access and catering to the diverse needs of unbanked and underserved populations. Let's explore some key areas of collaboration to drive innovation in Financial Inclusion: 1. Digital Onboarding and KYC: Fintech companies are providing digital platforms and mobile apps to streamline customer onboarding and KYC (Know Your Customer) processes for BCs. This reduces paperwork, accelerates account opening, and improves the overall customer experience. 2. Micro-loans and Credit Scoring: Fintech companies are leveraging alternative data sources and machine learning algorithms to develop innovative credit scoring models for BC customers. ...

Combat Cybercrime and Financial Frauds: Workshop was conducted by DFS

30Apr

By AnkitNo Comments

Banking, BFSI, Digital Lending, Fintech, Insurtech, Lending, NBFC, Payments, Startups, Wealthtech

Combat Cybercrime and Financial Frauds: Workshop was conducted by DFS

Workshop on Collaboration Between Fintechs, and Law Enforcement Agencies The Department of Financial Services (DFS), Ministry of Finance, and the Indian CyberCrime Coordination Centre (I4C), Ministry of Home Affairs, recently organized a half-day workshop in Vigyan Bhawan, New Delhi to promote collaboration between Law Enforcement Agencies (LEAs), Start-ups, and Fintech ecosystem partners. The workshop aimed to foster innovation, compliance with regulations, and address challenges such as cybersecurity and digital financial frauds. With the participation of key stakeholders, the event emphasized the need for greater collaboration to harness the full potential of the Start-up and Fintech sector in India. Collaborative Efforts for a Thriving Sector: During the workshop, the DFS Secretary,...

NBFC Leaders Advocate Responsible Lending and Equitable Co-Lending with Banks

29Apr

By AnkitNo Comments

Banking, BFSI, Digital Lending, Lending, Microfinance, NBFC

NBFC Leaders Advocate Responsible Lending and Equitable Co-Lending with Banks

Non-banking finance companies (NBFCs) are at the forefront of financial inclusion, bridging gaps in credit access for underserved segments. In recent discussions at the ETBFSI NBFC Connect’24 Summit in Chennai, industry leaders underscored the importance of responsible lending practices and equitable partnerships in co-lending arrangements with banks. Responsible Lending Practices Ashish Mehrotra, MD & CEO of Northern Arc Capital, emphasized the significance of reaching the last mile through partnerships. He stated, “As long as we are able to reach the last mile in partnership/co-lending, we bring more value to the ecosystem.” This approach ensures that credit reaches even the most remote borrowers. NBFCs adopt a calibrated and responsible underwriting process. T...

27Apr

By AnkitNo Comments

BFSI, Banking, Blog, Digital Lending, Lending

How BNPL Companies make Money?

BNPL companies (Buy Now Pay Later) employ various strategies to generate revenue. Let’s explore how BNPL Companies make money: Merchant Fees: BNPL providers charge e-commerce platforms and retailers a fee for integrating their BNPL services. This fee ensures that the BNPL option is available during checkout on these platforms. Interest and Fees on Late Payments: If consumers fail to repay within the stipulated period, BNPL companies charge interest or late fees. These penalties contribute to their revenue. Credit Risk Management: BNPL firms assess credit risk and set credit limits for users. They earn by managing this risk effectively and ensuring timely repayments. Partnerships with Financial Institutions: Some BNPL providers collaborate with banks or financial institution...

Buy Now Pay Later (BNPL) in India: A Growing Trend, 2024

27Apr

By AnkitNo Comments

Lending, BFSI, Blog, Digital Lending

Buy Now Pay Later (BNPL) in India: A Growing Trend, 2024

The pandemic has accelerated the adoption of digital payments in India. Online payment transactions more than doubled in 2021 compared to 2020, crossing a billion in number. Buy Now Pay later (BNPL), which allows consumers to purchase items upfront and pay for them later within a stipulated period, has become increasingly popular. Let’s delve into the details: What is BNPL (Buy Now Pay later)? BNPLs (Buy now Pay Later) are small-ticket loans that empower consumers to buy products online and offline without immediate payment. They can either pay in a lump sum or opt for the no-cost EMI route. The underlying principle is to enhance consumer spending power through readily available credit. How Does BNPL Work? Purchase and Selection: After making a purchase, customers choose BNPL as th...

Buy Now Pay Later (BNPL): A Historical Perspective

27Apr

By Ankit2 Comments

BFSI, Digital Lending, Goverment Notice/Circulars, Lending

Buy Now Pay Later (BNPL): A Historical Perspective

The concept of BNPL, which we commonly associate with modern financial arrangements, has surprisingly deep historical roots. Dr. Sathyan David, former Chief General Manager of the Reserve Bank of India (RBI), drew parallels between ancient lending practices and today’s BNPL arrangements during the ETBFSI NBFC Connect’24 Summit in Chennai. Let’s explore this intriguing connection. Ancient Lending Practices Guptas and Mauryas: Dr. David highlighted that BNPL-type practices have existed since the period of the Guptas and Mauryas. During those ancient times, lending to small borrowers at high interest rates was already a common practice. The Guptas and Mauryas engaged in such lending activities, demonstrating that financial transactions involving deferred payments were not new...

Transparency in Digital Lending: RBI’s New Draft Guidelines for Loan Aggregators

27Apr

By Ankit1 Comment

BFSI, Digital Lending, Goverment Notice/Circulars, Lending, Regtech

Transparency in Digital Lending: RBI’s New Draft Guidelines for Loan Aggregators

The Reserve Bank of India (RBI) has recently unveiled a draft circular that outlines a framework for loan product aggregation by lending service providers (LSPs). The primary objective of this initiative is to enhance transparency for borrowers in the credit intermediation process. Let’s delve into the details of this significant development. Background and Challenges In the digital lending space, LSPs play a crucial role by offering aggregation services for loan products. These LSPs, or even regulated entities (REs) acting as LSPs, establish outsourcing arrangements with multiple lenders. Their digital lending apps/platforms (DLAs) match borrowers to suitable lenders. However, a critical challenge arises: borrowers often lack upfront information about the potential lender. I...

Decoding RBI’s Draft Guidelines on Digital Lending- 26th April 2024

26Apr

By AnkitNo Comments

BFSI, Blog, Digital Lending, Goverment Notice/Circulars, Lending, Review

Decoding RBI’s Draft Guidelines on Digital Lending- 26th April 2024

The Reserve Bank of India (RBI) has issued draft guidelines to ensure transparency in the aggregation of loan products from multiple lenders. This move is aimed at enhancing customer centricity and ensuring complete transparency for borrowers in the credit intermediation process. Key Highlights of the Draft Guidelines: Aggregation Services: Many Lending Service Providers (LSPs) offer aggregation services for loan products. An LSP or a Regulated Entity (RE) acting as an LSP may have outsourcing arrangements with several lenders. The Digital Lending App/Platform (DLA) of the LSP/RE matches the borrower to one of the lenders. In cases where an LSP has arrangements with multiple lenders, the identity of the potential lender may not be known upfront to the borrower. Prior Information t...