Gain expert insights into Digital Lending, Fintechs, NBFCs, Banks, and Co-Operative Banks by Mani Parthasarathy.
In the traditional way of lending, how can we detect fraud? One of the answers we got is -
Do we need a Bank, or do we need Banking?
Recent use case from a borrower:
1) When he applied for a loan from Bank-A
How does "Embedded Lending" work in B2B Marketplace?
1) "Embedded Lending - Fintech"
Are you familiar with the majority of anomalies discovered during bank statement analysis?
Do you know how Bank Statements help Lenders?
Every Fintech is pitching the same story where they can disburse the loan in less than 10 mins, or in-principle loan approval can be given in 5 mins.
One of the bankers said, "If I know this customer is eating Briyani for Rs 250 every Tuesday, how can I use this data for underwriting?"
3 pivotal aspects of Loan origination in Loan Against Property
The RBI's recent move has stopped the Paytm's lending dreams, and you might be wondering why! Let me break it down for you in simple terms.
3 Top common Mistakes/Frauds a Loan officer/Field Staff do and you can see how technology can help fix it.
I had a candid chat with a fintech enthusiast about the struggles they face when integrating lenders/bankers into their Tech (Loan Origination System, Loan Management System, Core Banking Systems).
Starting a fintech business? Here's a tip: Focus on trust and your brand from the start – it really matters.
4 key stakeholders in embedded finance.
1) Consumers: Let’s say,
Ever wondered how credit offers pop up when you're looking for a new iPhone on Amazon?
How can Consumer Internet Platforms such as MyGate or Quickr contribute valuable data for assessing customer eligibility in Embedded Finance?
What is the actual process of co-lending? It involves 3 stage process:
I spoke to a Lender where they have automated everything except one process. Do you know what that is?
8 Business Models:
1) SaaS
Cloud-based subscription
Pay as you go - based on consumption (users, resources)
e.g. Slack, Zoho
6 points - Why do customers love their banks?
1) They get a simple, intuitive, and friction-free experience.
What's the cost of a failed transaction in Financial Services? First, let's take an example in a different industry.
Let us talk about the most sought means of digital lending called BNPL or Buy Now and Pay Later.
What is the Gig economy?
A labor market that doesn't work on traditional nine-to-five office jobs.
Top 8 reasons Why people love credit cards?
1) It gives a clear credit line in your pocket
As a lender, do you want to focus on a segment worth 17 Lakh crore?
Let me explain how the existing market works. How will banks give loans to small businesses?
The Credit card industry in India is growing at a high CAGR of 22-25% YoY.
9.1 crore - credit cards in India
If a customer makes a purchase in an e-commerce site/Retail shop using a Credit card, What option does he prefer?
I was talking to a lender yesterday. The conversation went as follows:
© 2024 LightFi India Private Limited. All rights reserved.
(Formerly known as Habile Technologies)
An interesting insight on vehicle loans for lenders.
A trend we are seeing today – the first-hand vehicle ownership is decreasing with time. Why? People are upgrading their vehicles in every few years because of technological advances. And, this can be seen more with the millennial generation.
So, what should a lender do in terms of financing?
– Estimating the residual value of the vehicle at the start of the financing period.
– Charging a borrower only for the residual value (which is the difference between the value after a few years and the current value)
Example: A bike currently is INR 1 lakh. You want to buy the vehicle for 2 years. A lender will estimate the residual value of that bike today and what it would be after 2 years. If the estimated residual value = INR 45,000, the lender will charge you only that (say, INR 55,000 with interest for this instance) during your tenure.
At the end of 2-year period, you have 3 choices:
1. Return the bike and upgrade to a new one without going through the struggle of selling it.
2. Pay the lump sum remaining amount to own the vehicle outright.
3. Extend the financing and own it by keep paying the EMIs for the remaining amount of the vehicle for the next 12 or 18 months.
Benefits for the borrowers?
– Flexibility to use a vehicle and upgrade to a new one.
– Affordability to not pay for the complete value of the vehicle with the intention to use for a lesser amount of time.
– Convenience in owning the vehicle.
Say goodbye to the old lending option and embrace the new way of financing for vehicle by lenders!
How many of us know this?
1) Tiktok does Lending ( is it an entertainment company or social media company or a fintech company?
2) Youtube China does Lending
3) Top 100 internet companies in China(no matter what business they are in) do Lending
The team which was heading Lending in Tiktok was the Advertisement team. If we do Ads, we do X no of revenue. But if we do lending, we’ll get X+30% more revenue. This is on the same Ad spot.
Ad team has transformed into a lending team, and in today’s world, it’s possible because the subject matter expertise can be put in as an API and given to you.
Embedded Lending as a service is becoming popular in India too, and I am happy to be part of this ecosystem.
The answer is No. Only the top 10 crore people have access to many credit products in India. Almost all Banks focus on this market.
Once you go beyond that, the credit access rate has dropped significantly due to multiple factors.
1) Customers who are having low income(30-40K per month)
2) Not earning from an employer who belongs to Category A or B
3) Not from Tier 1 or 2 cities
NBFCs and Fintechs focus on the above segment, pushing another 10 crores of people.
But in India, 70 crores more people are formally or informally employed, which still needs to be tapped.
After smartphone penetration, people are not watching their SMS at all. They use SMS only for OTP related transactions. That’s it.
But What can a Lender see in your SMS after you consent to them?
Lender can see income, expenses, and any other Fixed Obligation like (EMIs/Credit Card).
1) Income – Parameters like Average Salary Credited, Stable Monthly inflows like Rent
2) Expenses – Average monthly debit card transactions, UPI Transactions, Monthly ATM Withdrawal Amount etc
3) Fixed Obligations – Loan payments have been made for the past few months, Credit card transactions.
It also tells the Lender the adverse incidents like
1) Missed Loan payments
2) Cheque bounces
3) Missed Bill Payments like EB, LPG gas bills.
4) POS transaction declines due to insufficient funds.
A massive chunk of data is available in our SMS (more than 700 data points), which helps Lender to make a credit decision.
#lendtech #fintech #manispeaksmoney