Image Source : PIXABAY Digital lending is not just making the entire process of taking a loan faster but efficient also.
Digital lending: Digitalisation has played a very important role in the transformation of various sectors, including the financial sector. It has helped people and banks get rid of extensive paperwork and this has made digital lending popular. Here we are going to discuss the concept of digital lending and its benefits and risks.
What is digital lending?
As the name suggests, digital lending is a remote and automated lending process. This uses digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service.
Benefits of digital lending
Quick process: It makes the process quite fast and the process can be completed through an online form.
Instant approval: This enables quick approval with the help of an automated eligibility determination system.
Fast disbursement: Loan disbursement is quite fast when compared to traditional loans.
Digital lending is not just making the entire process of taking a loan faster but efficient also.
“Digital lending is transforming the way individuals and businesses access credit, making the process faster, more efficient, and widely inclusive. With AI-driven technology, digital lenders can assess creditworthiness quickly, ensuring funds reach those who need them most,” said Vikkas Goyal – founder of Rupee112.
As per RBI, the share of unsecured advances in retail credit has increased from 25 per cent in 2007 to 35 per cent in 2023, indicating a growing demand for short-term credit products.
Does it involve some risk?
While digital lending has revolutionized financial operations, borrowers need to be extra cautious.
According to Amit Bansal, founder of BharatLoan, easy accessibility must be accompanied by safeguards to protect borrowers from misinformation and unregulated practices.
“Transparency, data security, and responsible lending are essential to building trust in the ecosystem. Ensuring a secure and ethical lending environment allows borrowers to make informed decisions without concerns over hidden risks,” he said.
Banks like State Bank of India are compliant with the Digital Lending Guidelines issued by the Reserve Bank of India (RBI).
State Bank of India is offering Digital Lending Services through its following channels/Apps/Platforms:
– YONO SBI App
– YONO Business SBI App
– Internet Banking Platform (INB)
