MARCH 202019ndia always had relationship with driven banking and lending. To open a savings account in the State Bank of India, one still needs `an introduction from a respectable person / a customer of the branch'. The local auto garage only gets loans from the neigh-borhood bank, if the branch manager knows the propri-etor personally. This seems like a great mitigant of risk. With NPAs soaring, this seems like a reasonable strat-egy to control bad loans. However, this is only a false comfort. Most of the NPAs come from large accounts greater than INR 1 Crore. What this relationship driven finance has done is that it has made credit very exclu-sive. Credit cards are seen as a luxury when it needs to be a necessity like mobile phone and internet. Credit is essential to break out of the poverty cycle.Technology is yet to disrupt the lending space as it has done in entertainment, e-commerce, payments and to some extent in Banking. Everyone is watching videos & live events on their mobile phones. Amazon delivered packages to 99 per cent of India's pincodes. Tea vendors on bicycles are accepting PayTM. Banks no longer want customers walking into their branches. However, lend-ing is lagging behind. While the loan or the credit card application process has been digitized, there is a lack of awareness among users. Many are still apprehensive of using lending apps. Submitting sensitive information like ID proofs, Bank Statements through a mobile app is still a challenge for most. The underwriting policies are still archaic in most lending institutions. They are yet to embrace data science when it comes to the lend-ing decisions. Post approval formalities are still largely paper-based. The customer still has to sign agreements and provide post dated security cheques. An aspiring entrepreneur, Rahul is endeavouring to build the next generation technology & analytics platform to bring responsible credit to the underservedTHE IMPACT OF TECHNOLOGY ON MOBILE MONEY LENDING SEGMENTSBy Rahul Sekar, Co-Founder & CTO, Shubh LoansCXO INSIGHTSIRahul Sekar, Co-Founder & CTO
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