Page 35 - Banking Fiannce March 2018

ARTICLE

POLICY SIDE :- Jandhan Yojna, UPI and solving Alibaba is making huge investment in PayTM. In the supply
interoperability issues help Fin techs to come forward and side , the aggregators like Policy Bazaar and Funds India
encase the huge opportunity available before them. are providing insurance and Mutual Fund Investment
opportunities at comparable rates. These companies play a
JAM (Jandhan, Adhaar and Mobile Trinity added by credit role of middlemen leveraging data and using algorithm to
scoring through real analytics. provide low cost intermediation services.

The biggest challenge for SMEs is to raise financing through Why to go for P2P Lending or
formal banking is Borrowing?
Y Lack of collateral and
1. P2P (Peer to Peer) platform may fetch higher returns
Y Lack of long history of operations (financial statements)
on lending but returns are not assured.
Although the GOI and the regulator (RBI) have mandated 2. The fin tech companies are becoming first choice of the
the financiers not to insist upon collaterals for the loan GEN Y because of their faster way of providing choice
covered under MUDRA up to Rs. 10.00 lakhs entrepreneurs, of availment of credit with total transparency.
yet, the formal bankers with the old mind set do not adhere 3. The credit is made available to the needy by giving a
to strictly to the guidelines. This in turn creates a right type lot of weight age to their social behavior by extra plating
of opportunity for the Fintechs. financial behavior from social activities.
4. Borrowers are charged registration and processing fee
The Fintechs are on the legally permitted way of
only after they get a loan. Interest payment is done
partnership with the private bankers, i.e Amazon with Yes
separately.
Bank for promoting its "Seller Lending Program”. This
partnership provides Secure and Unsecure loans between 5. The global market for P2P lending is expected to grow
Rs.5.00 lakh to 1.00 Crore. The facility of Opening of Current at a CAGR of 60 per cent to USD 1 Trillion by 2025 from
Accounts , trade services, forex payment gateway., loan 9 billion in 2014. US, China and UK are top P2P lending
products etc are provided by Yes Bank at competitive rates. countries. Countries like ours are on the way to follow
Amazon provides easy market access to the bank's the path.
customers. 6. Since credit demand of nearly 10 percent MSMEs only
is met by the formal banking system, the NFBCs are next
Likewise, Flipcart Partnership with Axis Bank, Bajaj Fin Serve to banks. But, still the gap of demand and supply is huge
and lending cart is doing the job exceedingly well by and the P2P Lending platform, as on date is seen the
financing the MSMEs. Snapdeal has already crossed the only alternate with transparency.
disbursal figure of Rs.1000 Crore Collateral free loans with
the help of Capital Assist. SBI partners to provide loans to e
commerce retailers. The bank has a specially designed
product as E- smart SME working capital product.

Payment Fintechs - Mobile Wallets and Digital Payment
Services (Innovations and the Supply side) Such transactions
are growing day by day have touched a trillion in number.
The main players are PayTM, Mobikwik, Citrus and PayU.
Many more are in the queue. Smartphone, Internet and
online shopping is becoming a fashion for the Gen Y. GOI is
also giving a boost to digital transactions . MSEs will be given
some concession in Rate of Interest for the transactions
done digitally.

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