Financial Inclusion ❤️ Ethical Lending

The infrastructure for digital lending has improved significantly over the last 5 years. 

With UPI, E-KYC, Digital signatures and a monumental jump in India’s internet penetration, the foundation for digital and omnipresent financial services is rock solid. 

The internet is helping us rapidly reach places where even the roads don’t go. Every app is becoming a distributor of financial services. Every mobile phone is becoming the customer’s personalised banking branch. Any company not optimising for this new reality is napping at the wheel. 

This is a critical moment in our country’s journey to financial inclusion. The technology infrastructure is going to only become better from this moment on. But as Uncle Ben said in Spiderman “With great power comes great responsibility“

Financial inclusion is hollow without ethical lending. One of the many important aspects of financial inclusion is enabling access for the majority to formal credit. 

From a borrower’s point of view, formal credit has many benefits. Some of them are listed below:

• Build a credit history for larger future loans

• Access to cheaper loans as borrower risk profile decreases

• Transparent pricing 

• Fair collection practices in case during collections

The informal lending space is notorious for borrower exploitation and so our focus today is on the last 2 points. 

With digital lending, we have the chance to bring a large chunk of informal sector borrowers into the formal lending space. With this huge opportunity, we also have a duty to dramatically improve the pricing and collections experiences for the borrowers. 

While the RBI, app store and play store have issued guidelines at different points in time, we wanted to not only compile them but add to them basis our experiences in digital lending for the last 5+ years. The philosophy was simple: Treat borrowers how we would want to be treated.

The goal here was to build a template that can be a reference point for all fintechs, especially those looking to enter digital lending. 

This is our initiative to bring more transparency and accountability to this space. We firmly believe delivering A+ borrower experiences is the key to loyal and happy customers. This is the foundation of a healthy lending business. 

Here is the link.

We will continue evolving these as we get feedback. Any suggestions on improving this document are welcome 🙏🏻