The banking and financial services sector has witnessed a sea change over the past year with banks increasing focus on technology, demonetisation-induced cash crunch causing a spike in digital transactions, and proliferation of fintech players offering innovative products and services.Customers now have more options and need not rely on banks alone to fulfill their financial needs. They are also getting innovative ways to be financially served with more competitive rates.
To keep existing consumers hooked to their digital platform while also tapping new customer segments, fintech or financial technology players are expanding their core businesses.
Online marketplaces such as BankBazaar.com, PaisaBazaar, and Deal4Loans (which rebranded itself as Wishfin) have expanded their focus to other financial products such as mutual funds, savings and insurance products and providing credit scores.
Earlier this month, a similar platform Rubique tied up with government-certified National Small Industries Corporation Limited (NSIC) to ease credit facilitation to small and medium enterprises (SME). It received access to NSIC’s customer base of more than Rs 3 lakh.Manavjeet Singh, Founder and Chief Executive Officer of Rubique, said: “This partnership has also given us access to 20 more public sector banks. So we now have tie-ups with over 65 financial institutions [including other fintech players offering loans] and also assisted with close to 4,000 professionals to garner more leads of borrowers.”
Rubique also works with four or five banks, providing them customised solutions to cater to their SME customers.
Similarly, Capital Float is a digital finance company serving small businesses and startups in India. It offers loans to kirana shops and mom-and-pop stores. The loans range from Rs 25,000 to Rs 1 lakh at an interest rate varying from 16-20 percent.
Gaurav Hinduja, Co-Founder and Managing Director of Capital Float, said, “We are live in 10 cities with this product and doing a further pilot in 25 more cities. We will add a few more verticals in the next few weeks largely to cater the under-serving segment.”
On the other hand, online SME lending platform FlexiLoans has raised USD 15 million (about Rs 100 crore) and are tapping supply chain firms to provide seasonal inventories to cater to the “50-million underserved segment.”
“We are trying to shift consumer behaviour. Funding is also given for equipment financing, for which we have tie-up with companies such as Samsung for providing smartphones to taxi drivers, etc,” said Manish Lunia, co-founder of FlexiLoans.
Payment gateway provider PayU India has plans to look at cross-border remittances and will soon offer small consumer loans to customers of online merchants.
Amrish Rau CEO of PayU India said: “We will help overseas sellers and websites based outside India to accept, settle and receive payments in India. We will tie up with banks not just for exchange fees but to move money in and out of India. Three banks are already on-board.”
Rau said the current focus is to facilitate small credit to consumers of up to Rs 2,500 to make purchases now and pay at a later stage.
Not just the private firms, but the government and NPCI (National Payment Corporation of India) have added Unified Payment Interface, BHIM and Bharat QR code to its arsenal of digital payment platforms.
However, security will be the primary concern. It remains to be seen how the ecosystem develops