Digitisation has completely changed the lending system in India which always existed. This has become possible with the shrinking gap between the new technologies and the lending system. With digital lending each and every step of the lending and borrowing process is now completed through electronic which means the process is completely paperless. A new class of companies known ‘FinTech’ companies are the one who are promoting Paperless Lending and has given a new path to the lending industry in India after America and China. FinTech companies has combined the financial services with the current technology which made it easier both for the lenders and the borrowers to avail and lend the money.

The Need of Digital Lending

Since the beginning of modern banking in India, the process to apply for a loan has been too lengthy which followed up with lots of stress, time consumption, tension too. Because of all these, it was very important and need of the time to introduce a new kind of lending which can provide an ease to the borrower to avail any kind of loan. Digital Lending is the solution to all the above problems and a new age in the domain of lending.


Digital Lending is nothing but an advancement in the lending and borrowing process where one can borrow within a short duration of time, without any paperwork. FinTech companies offer lending within 24 hours. With this advancement one don’t have to spend hours to visit bank, standing in bank’s long queues. Digital lending makes one free from the traditional persisting lending process where one have to spend lot of time on collecting and piling up the documents. Your loan is just a click away with the digital lending platform. You don’t need to submit document physically here. All you need to do is go to the online to the FinTech company portal and fill the details required and apply. Documents needed such as documents for ID and address proof are to be submitted online by scanning them.

How Digitalization in Loans is Changing the SME Fund Situation in India

With the point of adjusting the loan market for SMEs, FinTech firms are utilizing innovation to robotize and quicken the whole loan process from application and endorsement to confirmation and disbursal. With a one-stop answer for SME loans, business loans, personal loans, and credit card cards, organizations would now be able to get to loaning items round the clock.

Aside from being moderate and simple, the procedure is likewise made fast, totally paperless, secure, and absolutely straightforward for SMEs looking for brisk and simple money for business development. Highlight rich applications and web-based loaning stages, for example, Rupeeland, IndiaLends, MoneyTap, Lendbox, FTCash, and Rubique are making individual advances helpful and bother free for borrowers.

“Jan Dhan Yojana” and the India stack have made end-to-end computerized loaning a reality. India has jumped many propelled economies by setting up open design layers, for example, Aadhar, UPI, Bharat Bill Payment Systems; and frameworks, for example, GSTN, trends and Gem which will go far in boosting advanced and information empowered loaning in India,” said Alpesh Shah, Senior Partner and Director at BCG India.

Factors helping Rise of Digital Lending in India


Using technology puts digital lending platform in the driver’s seat. For loan processing there is a system/software now to check the documents, process the loan application and to disburse the approved loan. All this has made it easy for the customers and with the continuous upgrade of tools the disbursal time is reduced which makes the loan borrowing faster and better.

Go Green: Paperless Personal Loans are Here!


Borrowing money always comes with giving your personal and important details like your ID card details, account details and many more to the lender. Which many of us are concerned about as nowadays identity theft and money theft from account is a common thing. But in case of Digital Lending software tools are used with which any kind of information is very secured which even can’t be hacked.

Disbursal Time

When it comes to Disbursal time Digital Lending is much better than the previous one. With Digital Lending loans get approved within 24 to 48 hour which earlier use to take 10 to 15 days for the disbursal of the same loan.

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Hassle free and smooth process

The traditional lending system caused so much of stress and tension to the borrowers as they have to visit bank again and again first to apply for the loan and then to trace the process. The processing took a long time which made the borrowers stressful and tensed but with the Digital Lending platform the process become so simple and the customers don’t need to go bank even for a single time and even it has a facility where the borrowers can trace their application process online being at home with their laptops and mobile.

Introduction of e-KYC

The introduction of e-KYC has played a major role in the bloom of Digital Lending in India as  through e-KYC banks can verify an individual’s Aadhaar information to verify his/her identity and many details such as address, Bank accounts and many more  . Now almost all banks in India have internet-banking and mobile banking facilities too through which a customer can download his/her financial history and demonstrate his/her ability to repay a loan efficiently. Traditionally, ability to repay the loan was shown/demonstrated by submitting bank passbooks and income proofs statements.

Guide to KYC and eKYC

Benefits of Digital Lending and Borrowing System

No Physical Documentation Required

With the Digital Lending system the way of documentation has completely changed. Earlier for documentation the customers has to collect and pill up all the documents required and then they need to submit it all in the bank. But now with digital lending the no. of documents has also reduced as now customers e-KYC is linked to their bank account which by banks has all the information about the particular customer. Even when some document is required it need to be submitted online on the Fin Tech’s portal or bank’s portal.

Quick Disbursal

As soon as the information provided by the applicant is verified by the lender and all the steps required have been completed properly, the applicant will receive the loan amount instantly in their bank account.

Ideal Option in Case of Emergencies

Digital loans are best options in case of any financial emergencies like wedding requirements, medical, vacations, in case of accidents and so on.

FinTech companies like Finance Buddha providing loans digitally in a complete Quick, online and hassle freeway, right from applying online to disbursal can help you in time of emergencies as with traditional lenders we strive hard to disburse the loan amount. But with Digital Lending platform it makes borrowing an ideal option for emergency scenarios where there is an urgent requirement of money as with digital lending one can get money within hours.

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Reasonable Interest Rates

With the Digital Lending the average interest rate of consolidating outstanding debt has come down to 14.8% which was 21.8% with the traditional bank lenders previously. This rate is sufficient enough to know the difference. Even for other loans like personal loans the interest rate charged to the customers is reasonable to that of the traditional lending banks.

Transparency in lending processes

FinTech companies have a transparent loan process. Loan applicants can keep a track of their loan application at every stage. Even if your loan application gets rejected then you will get to know why your application got rejected and where you lacked behind in your eligibility or it was something else which went wrong.

SME Financing: A Variety of Options

Apart from the personal level Digital Lending platform has even helped many SMEs to grow. As with the traditional lenders they were not able to borrow as much as they required and it took long time too. But with the growth of Digital lending in India SME industries also flourished as FinTech companies provide loans easily to the SMEs and start-ups according to their eligibility and without any hassle.  This made SMEs grow in India and now contributing a big part of India’s GDP.


(Updated 30-08-2018)