Summary: With viable technologies, lending infrastructures, and legal frameworks in place, the time has come for some major digital-lending winners to emerge.
Fremont, CA: Many believe that FinTech is one of the main leading forces that can help overcome the barrier of low financial income. For instance, FinTech has revolutionised loan collection and disbursement in the banking, financial services, and insurance industries sectors in recent years. With the rapid rise of digital banking services, the popularity of digital lending has exploded. The process of obtaining credit through the internet is known as digital lending. The increasing penetration of smartphones, the flexibility of the credit range, and the rapid online transactions that it facilitates have all contributed to its FinTech’s growing popularity among new-age lenders.
FinTech companies analyse digital payment data for effective underwriting in near real-time. FinTtech's credit-based payment products, such as Buy Now Pay Later (BNPL) or convert to EMI products, have finally replaced all real-time internet transactions. Even so, businesses use customer transaction and financial data to borrow digital currency through an API-based approach, greatly reducing the time it takes to receive personal loans or wait for their receipts. As a result, online lending has played an important role in avoiding the tiring red carpet that often accompanies traditional credit processes.
One of the major examples is the rise of growth of adoption by the mMicro and sSmall mManagement eEnterprises (MSMEs). MSMEs have flocked to online lending platforms in the aftermath of the COVIDovid-19 pandemic, as they were unable to secure financing through traditional lending institutions and thus had to turn to digital lending. The quick turnaround time and onboarding, as well as and disbursement within minutes, have enticed cash strapped MSMEs to seek credit through these digital channels.
So, where do we go from here?
The bottom line is that the pandemic has undoubtedly accelerated the inevitable adoption of FfinTtech, and digital lenders have reaped the benefits. As FinTtech services will continue to attract more users this year, and they will swiftly become the new normal. With viable technologies, lending infrastructures, and legal frameworks in place, the time has thus come for some major digital-lending winners to emerge.