Lending in the Age of Technology28 Jun 2018
As technology rapidly takes over every industry, it streamlines every teeny-tiny little process for you and me. And in doing so, it generates a desire in us for faster, high-quality, convenient and error-free products and services.
At KNAB we use the latest technology with customer convenience and experience to bring credit to MSMEs at their doorstep. The lending industry has directly or indirectly touched and transformed many of our lives today. From sole trader businesses to partnerships, MSMEs and large corporates, the lending industry is responsible for the satiety of humanity’s growling hunger and persisting passion for innovation and growth. Fuelling the dreams of millions of entrepreneurs and business owners, lending is responsible for the existence of several products that we make and use.
Consider the example of Starbucks©. Three ordinary people – Jerry Baldwin, Zev Siegl and Gordon Bowker started with a small loan of $ 5000 and a small investment of $ 1350 from each of their pockets. Today, the same people (now billionaires) own one of the world’s most popular premium coffeehouse chains – Starbucks, whose revenue is nearly $ 22 billion per year.
During the days when Starbucks© was a start-up, the process of lending was so much different from what it is now. At that time, borrowers had to go door-to-door from one lender to another until one of them agreed to help them with the money they needed. Once a lender agreed, they would have to do plenty of paperwork which took up a lot of time and then also complete the legal process by themselves as lawyers were unaffordable. This often led to them overlooking certain clauses and hence risking a lot, especially collaterals like their property, land, jewellery or other assets.
Innovative ideas created by genius minds have played a key role in this major transformation, no doubt. But what has really optimized the process is rapidly evolving technology. Today, when a business owner goes out to borrow a sum of money, he or she is aided by information that can be accessed from anywhere. This information covers everything – the documents, the process, the legal formalities, the interest and so on. Nobody can fool a person who holds the weapon of the internet.
But there are certain things that you need help with, especially if you are new to this age where people are constantly clicking and typing every waking moment of the day. Let us look at some of the important tools that will help any business owner in the process of borrowing.
IndiaStack© is a set of digital tools that is boosting the speed of the service industry. It has revolutionized the way each one of us makes financial transactions on a day-to-day basis. With processes such as Aadhaar, eKYC, UPI, Digilocker and eSign, a big step has been taken towards aiding the otherwise slow and lengthy process of lending.
Today, it is because of growing fintech firms and IndiaStack© that your start-up can obtain loans in less than a week. Following are two methods of payment that will change the way you look at repaying your business loans, or for that matter any kind of transactions that you make on a day-to-day basis:
- National Electronic Funds Transfer (NEFT) – This system, maintained by the RBI not only enables individuals, corporates and firms having bank accounts in companies registered with the NEFT scheme to transfer money electronically, but also allows for an unlimited amount of money to be transferred!
- National Automated Clearing House (NACH) – Like the NEFT, Corporates, the Government, Banks, Financial Institutions, etc. can electronically transfer money via different banks that are registered with the NPCI’s (National Payments Corporation of India’s) NACH scheme. However, the difference here is that your business (or the bank or government that is aiding you) can make regular payments that can be high in volume like salaries, dividends, subsidies, insurances, electricity and water bills and so on.
Apart from this, lending has been made more risk-free and fair for both lenders and borrowers. A simple process aided by the Credit Information Bureau India Limited© (CIBIL) is used by lenders to check how credit-worthy you or your business is. (Or in other words, how safe is it to let you borrow a sum of money from them?)
A firm called the TransUnion CIBIL© looks into your past financial records and other important financial documents to determine your or your business’ credit Score. This score is updated from time-to-time by CIBIL© and helps lenders to take a call on whether to provide you or your business the loan. Both individuals and businesses have their own credit score, provided by CIBIL©.
At KNAB Finance, too, we use these tools, along with an overview of your business’ actual performance to serve you more efficiently by optimizing and simplifying the otherwise paper-exhausting, time-consuming and fairly complicated process of lending. With a 100% digitized and secure platform and the new Bizsmart Loan®, we are committed towards making this process easy for you and fruitful for your business:
Once you start the process of applying for your loan, we will provide you with your own KNAB account which allows you to electronically upload different kinds of documents easily and quickly from the comfort of your home or office. With easy Bizsmart Loan® from KNAB Finance which have zero pre-payment charges, an application process that requires just a few hours and an assistance over phone and chats, your dreams will come true very soon! Get in touch with us today and you will have your loan within a week!