Automation and Digitalisation in Micro Lending

October 14, 2022

Automation and Digitalisation in Micro-Lending

According to World Bank “By 2020, this number will reach 6.1 billion. Mobile-based digital technology presents a huge opportunity to enhance financial inclusion for the two billion individuals and 200 million micro, small and medium enterprises (MSMEs) in emerging economies that still lack access to basic savings and credit services”
Micro-Lending opens up huge opportunities for Lending business that can leverage their experience in lending and position their services to these individual and MSMEs that are looking for faster and transparent credit.

Operationally Micro Lending is a mammoth task as Credit decision and Customer assessment is crucial for profitability and healthy Loan Books. Lenders – MFIs, NBFCs or Online Lending Platform should deploy technology efficient processes and automate the process of customer acquisition, Credit assessment and disbursement to reach out to target client and acquire the right customers.

An end to end Lending solution that can integrate with various data sources like Credit Bureaus – CIBIL or CRIF, KYC databases and other new age data points to profile prospects borrowers and create a credit profile of the client when making informed credit decisions. Cashless and immediate real-time disbursement with seamless integration with banks can provide the much-needed edge that can deliver on-demand credit when the customers need it.

Motivating borrowers to self onboard by subscribing to the Lenders mobile app will allow financial institutions to capture digital footprints of the borrowers and provide a more inviting and discreet experience of credit. Lenders should invest in a robust Mobile application and sound decision-making application that can facilitate this.

Assisted digitalisation and ease of use will help the financially exclude or “credit invisible” population to access mainstream credit with help of mobile technology. Effective use of Mobile technology and effective digitalisation will expand the reach of business and credit helping the business and the customer.

Taking the digital path will result in better debt collection. Most online credit disbursement is mapped with e-payment channels like Direct debit or Standing instructions, eNACH or wallets that make collection efficient, resulting in greater profitability. With digital channels, customer engagement is also improved and directed at the right point to make it more rewarding for on-time collections.

Digitalisation and automation are the two most important and relevant ideas that any lender should invest in today to reach more customer, improve credit decisions and build a profitable business.

Episode 09
How an Automated Loan Management System Can Maximize your Efficiency

Episode 09
Overcoming Loan Servicing Challenges with Unified Lending Technology

Unified lending technology presents a transformative solution for overcoming the challenges associated with loan servicing. By enabling seamless integration, data centralization, and automated payment processing, lenders can streamline operations, improve efficiency, and enhance customer satisfaction.