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Bengaluru: India’s leading fintech startups would play a critical role in project Kashi (cash over internet), which is being reviewed by the Prime Minister, to provide quick small-ticket loans to farmers, labourers and low-income families to tide over the liquidity crisis caused by Covid-19.
The fintechs are looking to build a platform using direct-benefit-transfer (DBT) data and other available information like demographics and micro-finance institution loan history that will help assess creditworthiness and issue loans directly in bank accounts within 10 minutes. NITI Aayog, the policy think tank of the government, is also actively involved in the discussions.
Leading entrepreneurs, who attended a review meeting on Friday with PM Narendra Modi, told TOI that DBT could be leveraged significantly to disburse loans, based on the monthly payments people receive and the same can be deducted over a longer period of time in instalments after the Covid-19 crisis. These loans could be for individuals or street vendors, garage owners, among others, who are facing a capital crunch triggered due to their work coming to a standstill. While contours are still being finalised, these loans could be anywhere between Rs 30,000-60,000, people present in the meetings said.
“People availing of DBT facilities do not necessarily have access to bank capital easily and institutions are also wary in terms of recovery, especially now. This platform will help with access to data and very low cost of recovery — an important factor for fintechs,” one of the people present in the meeting said.Fintech companies have started integration work and it will be again reviewed in a month by Modi as he is keen to leverage technology to enable low-cost, zero-touch lending and with zero fraud risk. For the current fiscal, the total DBT (cash and kind) is over Rs 81,000 crore with over 60 crore beneficiaries so far, according to government data.
“It will be an app-based platform. One would be able to sanction a loan in five minutes. Aadhaar card will be an important identifier for this. From an implementation standpoint, apart from data sources, there will be collaborations with banks, of course. Initially, we would do the lending and with better recovery and more confidence on the programme, financial institutions, starting with public sector banks would also do lending,” said Ranvir Singh, co-founder, Kissht — a lending startup.
He was one of the attendants along with PhonePe co-founder Sameer Nigam, Pine Labs CEO Amrish Rau, Ashish Kashyap (former Goibibo founder — now IndWealth), and NPCI MD & CEO Dilip Asbe. Singh added that in the long term, options like adding a beneficiary (for loans) and health insurance can be explored too.
To expand the reach of other financial products like insurance, the fintechs have proposed KYC Setu, which will act as a repository of existing KYCs, and this would remove the need to do KYC all over again to buy new insurance amid the pandemic. “It’s a major hassle to do KYC each and every time to buy insurance or mutual funds. KYC Setu will help with that with existing KYC data with banks. The government is being proactive here and wants to build a made-in-India platform to address the hurdles amid Covid-19,” another person attending the discussion said.
The fintechs are looking to build a platform using direct-benefit-transfer (DBT) data and other available information like demographics and micro-finance institution loan history that will help assess creditworthiness and issue loans directly in bank accounts within 10 minutes. NITI Aayog, the policy think tank of the government, is also actively involved in the discussions.
Leading entrepreneurs, who attended a review meeting on Friday with PM Narendra Modi, told TOI that DBT could be leveraged significantly to disburse loans, based on the monthly payments people receive and the same can be deducted over a longer period of time in instalments after the Covid-19 crisis. These loans could be for individuals or street vendors, garage owners, among others, who are facing a capital crunch triggered due to their work coming to a standstill. While contours are still being finalised, these loans could be anywhere between Rs 30,000-60,000, people present in the meetings said.
“People availing of DBT facilities do not necessarily have access to bank capital easily and institutions are also wary in terms of recovery, especially now. This platform will help with access to data and very low cost of recovery — an important factor for fintechs,” one of the people present in the meeting said.Fintech companies have started integration work and it will be again reviewed in a month by Modi as he is keen to leverage technology to enable low-cost, zero-touch lending and with zero fraud risk. For the current fiscal, the total DBT (cash and kind) is over Rs 81,000 crore with over 60 crore beneficiaries so far, according to government data.
“It will be an app-based platform. One would be able to sanction a loan in five minutes. Aadhaar card will be an important identifier for this. From an implementation standpoint, apart from data sources, there will be collaborations with banks, of course. Initially, we would do the lending and with better recovery and more confidence on the programme, financial institutions, starting with public sector banks would also do lending,” said Ranvir Singh, co-founder, Kissht — a lending startup.
He was one of the attendants along with PhonePe co-founder Sameer Nigam, Pine Labs CEO Amrish Rau, Ashish Kashyap (former Goibibo founder — now IndWealth), and NPCI MD & CEO Dilip Asbe. Singh added that in the long term, options like adding a beneficiary (for loans) and health insurance can be explored too.
To expand the reach of other financial products like insurance, the fintechs have proposed KYC Setu, which will act as a repository of existing KYCs, and this would remove the need to do KYC all over again to buy new insurance amid the pandemic. “It’s a major hassle to do KYC each and every time to buy insurance or mutual funds. KYC Setu will help with that with existing KYC data with banks. The government is being proactive here and wants to build a made-in-India platform to address the hurdles amid Covid-19,” another person attending the discussion said.
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