Fintech in now starting in India (2/2)Cheap and quick　service , key for Spread

This article is written by Mr. Koichiro Ohira , Chief Fellow, Institute for International Socio-Economic Studies（NEC Group）

Financing is prioritized to large corporate

Banks in India give priority to large corporates in financing, so, the financing to small and medium enterprises are not sufficient to satisfy their demands. The same applies to financing for individuals.
A large number of individuals are still dependent on the private financing among friends and relatives.
Under such circumstances Fintech (Fusion of Finance and ICT technology) is gradually introduced in the field of financing represented by on-line lending.

On-line lending services are mainly offered to corporates or those individuals who have certain level of educational background and have enough appreciation and understanding of the platform and structure of on-line lending.

Even if the lending contract is concluded on on-line platform, there are cases where a mediator or agent is involved in between lender and borrower to facilitate the actual processing of the money transfer as most borrowers are small enterprises or low- income earners who might not have enough talent or knowledge of handling ICT devices and of financial system. Thanks to this involvement of mediator or agent those borrowers are also covered in this on-line lending service.

As explained above there are a variety of business models available in India to expand the basis of financing.

The Indian Government is in an opinion that on-line lending can widen up the opportunities for individuals and small and medium enterprise to obtain financing, so, they are positively supporting on-line financing while they are cautiously watching and preventing fraud that illicit lenders are collecting money on the fake conditions and run away.

The Government published rules in Oct 2017 concerning on-line lending to control the number of lenders who are disorderly established by regulating that lenders are registered officially in India Reserve Bank and have reasonable level of capital stock.

Registered lenders are also required to submit transaction data and information to “Credit Information Companies” who are dealing with credit rating.

We expect the enormous amount of data will be stored in progress and expansion of on-line lending.

Potential is huge

Due to limited level of service being offered so far by existing financial organizations we are not seeing yet the spread of financial services in India. Currently still many financial settlements are made by cash, and, financing is being made mainly and privately among friends and relatives. This, however, should not be the situation ordinal people and corporate are looking for.

We can expect in India huge potential for better financing service ,safe and effective and less costly as well

India with over 1.3 billion population and with expected high level of economic growth definitely needs better financing services, cheap and quick, supported by Fintech.

This should be the key for India to achieve its continuous growth and development in the future.