Tech advancements are driving and metamorphosing business practices across the globe today. Technology driven lending practices are taking over their traditional counterparts. Banks and financial institutions in India have been the major bearers and movers of finance across sectors, industries, firms and individuals. India has one of the largest banking networks in the world. Banks too have shifted their operations online with internet banking, debit and credit cards over the years. Now, their next phase of action seems to involve quicker access to credit.
To keep in pace with the current developments and the growing need for fast instant loans, SBI has launched ‘Project Tatkal’ to provide doorstep services and expedite the home loan application process. “It will bring down the average time taken for delivery of home loan to within 10 days from the date of receipt of completed home loan application form and relevant supporting documents from the customer,” SBI said to Press Trust of India.
The initiative is one of its kind and a pioneer step by the banking giant to smoothen up the approval process making things easier for the applicants. The bank even has over three million home loan customers with a portfolio of over 16,60,000 crore.
The press release though raises a lot of questions when it comes to comparing SBI’s standing with online lending apps like Fibe who, within three years, has very successfully crossed the 1000 crore loan disbursal mark. It scores over SBI’s project e-tatkal on several pointers. Established in 2016, the app has already become India’s largest consumer lending mobile application. Seemingly, banks are still far behind when compared with the agility, efficiency and speed offered by instant loan apps in India like Fibe.
As of 2017, Fintech companies enjoy a market share of 32% in the Personal Loan segment, higher than banks, credit unions or any other traditional Finance Institutions. With a host of attractive features like Instant approval and Paperless processing, you can avail these unsecured loans via the online route.
As you read this article right now, about 1500 instant loan companies are providing instant cash loans, salary advances and a bundle of other facilities to lend finances to their happy and satisfied customers. The online lending apps are gaining popularity due to the security and assurity with which a prospective borrower turns into a satisfied customer.
Co-founder and CEO of Fibe, Akhay Mehrotra says, “India is a fast growing market with a large percentage of young population. However, there is still a lack of access to credit, which ultimately is essential for development. This is where we come in; Fibe (Formerly EarlySalary)provides the credit underserved groups with timely financial assistance through technology and data-driven approach with a low delinquency rate. This has helped us scale up the business very quickly and we believe that we will cater to at least four to five million users in the next couple of years. The fact that we are now the country’s largest consumer lending application is a testimony of the faith and confidence that our users have in us.”
Let us have a quick review of what makes earlySalary so appealing to the young population:
The Fibe app does not let you wait 10 days or more as is the case with SBI. Your application is processed within minutes and the loan amount is disbursed to your bank account within the next 24 hours. Traditional banks have to go a long way before they can reach the automation levels reached by the app until now. It currently disburses over 60,000 loans a month and not even 3000 loans out of the lot require any kind of human intervention.
Zero human intervention and high levels of digitisation allow for a decision making process based on a unique lending algorithm that combines traditional scores with non-traditional data including other parameters such as risk assessment. The first time users and repeat users of the application are reviewed using a unique social worth underwriting system and a machine learning platform. This ensures that a person seeking credit for the first time or without a credit score gets a loan on the online platform too.
SBI is opting for doorstep approval of loan applications along with its OCAS facility. Fibe only asks for your bare minimum documents all of which can be uploaded on the app itself. From the application to the disbursal- all the formalities of the loan are completed on the app itself. The online lending app does not take into account the credit rating of the applicants except in some cases. The eligibility only asks for you to be a citizen of India, over the age of 21 years and earning a salary of INR 15,000 in rural areas and INR 18,000 in urban areas. There is no processing fees or hidden charges involved in Fibe loans.
Home loans are the only segment being touched upon by SBI under the new project. The facility will be only available in areas of high demand. Whereas with Fibe you can get a loan from INR 5,000 to INR 5 lakhs. Besides this, it provides a variety of other variants of credit facilities such as Advance salary, Instant loans, FeEs(education loan), credit cards, to name a few. The repayment terms are, of course, customisable as per the convenience of the borrower.
SBI is a name one connects with trust and assurance. Fibe does not lag behind in this department too. It has 220 corporate partners with a reach of a total of 5 lakh employees. They have recently opened India’s first ever FinTech SmartOffice in Bengaluru to serve an offline channel for customers. They have seen growth rate of 200% per year and the mobile application has been downloaded 9 million times. It seeks to serve those sections of society that are often rejected by the bank for want of creditworthiness- the young salaried professionals and the blue and grey collared workers.
SBI has a large legacy when it comes to serving customers and the new step with e-tatkal is being appreciated by the masses. Further details about the project are yet to be released. The best instant loan app – Fibe, on the other hand, is focusing on ensuring the best customer experience their priority. Though in their nascent stage, the app has been well received by the millennial and Gen Z when it comes to quick instant loans over the internet, without serving yourself the haggles of approaching banks or waiting for approvals over an online medium for more than a week. Stay tuned for more updates!