Akash Anand, Founder & Managing Director, BimaKaro

Born in a first-generation business family of modest means, Akash always dreamt of doing something big and had the zeal to strive hard towards realising his dreams. Drawing from his personal experiences, he entered the entrepreneurial universe solo and set out with dedication to establish and build a business from scratch, seeking to make his own mark. Presently, Akash is overseeing his own Group of four companies and managing business operations in the Retail Trade, Finance Services & Insurance sectors.


The pandemic upended economic activities across the world, including India, disrupting cash flows and income generation activities. With minimal means to combat the financial crunch, unbanked and underserved segments struggled to survive.

During this period, the importance of digital lenders in reaching out to diverse sections pan-India became all the more apparent. Of course, digital players were already making their presence felt in the pre-pandemic period. However, COVID-19 accelerated the digital drive even among those cohorts who were earlier wary of undertaking online transactions.

Greater Outreach

Even before the pandemic, soaring smartphone penetration, rising Internet connectivity and seamless digital deals were gaining traction every year. Going by a PwC report, the country’s digital lending market is slated to record a 36% CAGR by 2023.  Even in relatively remote regions, new-age lenders succeed in reaching out to those who have limited or no access to legacy financial services.

Thanks to the innovative products and services provided by new-age lenders, geographical constraints are overcome and transaction costs reduced while delivering an enhanced customer experience. Through diverse digital lending models, these fintech firms have been promoting financial inclusion in various ways.

Before the advent of smartphones and digital connectivity, financial inclusion seemed an extremely tall order. But digital has transformed the scenario. This is particularly pertinent when one considers that rural sections comprise around 70% of the country’s population, most of whom are unbanked or underbanked. Though more than 430 million PMJDY (Pradhan Mantri Jan Dhan Yojana) accounts were opened till August 2021, at least 14% of these remain inoperative.

Through digital lending firms, however, it is possible to serve even such underserviced cohorts. This was highlighted during the period after Demonetisation in November 2016. As cash transactions fell drastically, contactless and cashless digital deals helped save the day throughout India. When the pandemic-linked lockdown and social distancing restrictions disrupted traditional financial services yet again, even those earlier unwilling to deploy digital modes now quickly embraced the same.

Swift, Seamless and Convenient

Unlike traditional banking channels based on cumbersome protocols and physical due diligence for offering financial services to customers, digital lenders use swift and seamless online applications. In this way, micro products such as loans, savings and insurance are provided speedily to financially-challenged groups. Furthermore, there are flexible repayment options and comparatively low-interest rates.

For easy digital transactions, customers simply need to use their smartphones to register on an online platform. Customers can then avail of instant digital loans that could be disbursed the same day or even within minutes if their uploaded KYC documents are in order. Conversely, conventional banks take at least six to seven working days for approving a loan.

Given the convenient access to funds, even new-to-credit customers such as unbanked persons, Gen Z professionals and millennials have been using digital means to apply for loans. Moreover, even those lacking formal credit history or a low credit score can still avail of loans, although at somewhat higher interest rates to offset the additional risk that lenders take.

Considering their ability to undertake online KYC checks within minutes, fintech lenders are reaching out to customers among semi-urban, rural and low-income groups who were previously denied the services offered to mainstream sections. This is possible because new-age lenders leverage tech capabilities such as artificial intelligence, machine learning, data analytics and open application programme interfaces to garner insights about consumer buying habits and their spending patterns. Analysis of this data also aids the lenders in predicting customers’ creditworthiness and evaluating the risks inherent in lending to such segments. Through this, they then create alternative credit models.

Owing to their vast capabilities, AI-enabled tools provide digital lenders unprecedented opportunities to increase penetration among previously-untapped communities while balancing the risks. Backed by digital capabilities, new-age lenders display a greater risk appetite in lending to unbanked customers from lower-income categories. Their unique micro and short-term loans help these people develop a reasonable credit history without taking on a huge burden or getting into a debt trap.

As the government advances initiatives for greater financial inclusion among varied sections of society, digital lending platforms will continue playing a pivotal role in promoting this national mission.

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