Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members


Pramod Bhasin, Chairman, Clix Capital, expounds on how we have a unique opportunity to significantly expand financial inclusion.

Clix Capital is a broad based NBFC, focused on providing digital platforms and financial services to commercial companies and consumers across India.

Read this exclusive article to get Promod Bhasin’s insights on the following:

  • How to create inclusive technology and financial solutions that have a positive impact? Given that users in tier 2 and 3 cities might have limited accessibility and understanding.
  • How has digital lending opened a new world of possibilities for Indians everywhere?
  • How will a fresh wave of innovation see the industry meet customer demand for smarter, more personalised solutions?

Creating inclusive technology and financial solutions

It’s a myth that users in tier 2 and 3 cities have limited accessibility and understanding. India’s growth is happening in these rural towns. According to a report by Boston Consulting Group, half of internet users will be rural and 40% of will be women by 2020. This trend will continue to accelerate, and GDP growth in India will be driven by this trend. And as access to information improves across urban and rural India we should see a consequential rise in financial inclusion. The rise in internet searches for financial services, as well as the number of people who access internet before they apply to a bank or financial institutions for a loan demonstrates that overall need in all our smaller towns and cities as well as the ability to use technology to make their choices.

Technology will also have a profound impact on people who are new to credit which constitutes the majority of wiring Indians. They now have the reach and accessibility in ways that were unheard of in the past, when frankly all of us in banks and financial institutions have been guilty of not adequately addressing this huge unmet need. Technology allows us to build products and solutions to serve people’s needs- be it for a small grocer, cab companies, individual practitioners, traders, or agricultural products and farmers. This is unique point in time to significantly expand financial inclusion.

Digital Lending has opened new world of possibilities for Indians

Digital lending has opened amazing opportunities for Indians as well as for the entire world and there is a revolution happening in financial services. The affect can be seen in China who are at the forefront globally in digital lending and have driven exponential growth. India’s level of penetration for financial services products is amongst the lowest in the world- both for consumers as well as small businesses with a huge unmet demand.

In the past, this very large group of people have not been able to access credit for a variety of reasons—we have a giant unorganised sector with insufficient documentary proofs to get access to traditional credit. Cash remains a major part of the economy and Distribution itself is a major challenge in terms of reaching out to customers. These issues are getting resolved through digital lending solutions as well as the advanced use of algorithms and analytics that provide a higher and better level of insights into customers.

Many e-commerce, and payment wallet companies are now reaching out to extraordinarily large customer bases who love the speed and efficiency of service versus traditional financial institutions who typically dealt with customers at their own pace and service levels, since demand outpaced supply and customer service really didn’t have sufficient emphasis.

Technology now allows us to achieve “Mass Customisation”

Digitisation allows us to access data at a level which was previously unheard of. As a result, we can respond with terrific speed to a consumer who demonstrates an interest in a product. We can also use a wide variety of data that is available for individual as well as for small businesses. We have good laws in place that help in loan recoveries and credit bureaus are quickly expanding their reach and databases of customers. And there is a wide range of data such as utility bills, inventory levels, buying and spending patterns, information from bank accounts which allows financial institutions to truly assess credit worthiness despite the absence of formal and traditional documentation. Additionally, AI and Fintech companies around the world are devising personalised methods to analyse responses to facial expressions, social media and videos. While this is till experimental it will certainly yield results over time.

Technology now also allows us to achieve “Mass Customisation.” We can reach out to millions of customers and yet allow each customer to customise loans and products in unprecedented ways. Different customers have different requirement at different time periods and we must provide them flexibility to buy and repay as they choose. People may have requirements to repay at a different time and we can now begin to capture all these needs and customise loans for each customer. That’s the way we believe financial services will innovate and deliver more personalised solutions.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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