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How RupeeCircle is solving the credit problem for under-banked segments in India

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As a parent, you’ve dreamt of saving enough to fulfil all your child’s dreams and ensure a financially secure future for the family. Savings play a vital role in paying off expenses at every point in life, whether for children’s education, marriage or starting a new business.

Owing to other household expenses, using all of the life-savings for a single purpose is never wise and gives rise to the need for credit in the way of loan. But to obtain a loan, a person must be active in the financial ecosystem with a good credit score, which again is generated only through timely payments of EMIs of a previously obtained loan. If a person doesn’t have a credit score or a financial blueprint, the chances of acquiring a loan through a bank are negligible.

Credit Problem with the Under-Banked Segments

While India is proud to have grown the number of bank accounts from 53% in 2014 to 80% in 2017, the government-backed financial inclusion policies were only successful in moving most of the citizens from the ‘Unbanked’ to the ‘Under-banked’ segment. India still has a large number of under-banked population, where people have their own bank accounts but have no financial blueprint when it comes to acquiring a loan. Without a credit score and rejections from banks, they turn to the only remaining, but expensive credit option: Moneylenders.

The moneylenders profit from the helplessness of the under-banked segment and charge them around 40-50% interest. Without a credit score to be eligible for a bank loan, the under-banked segment have no choice but to pay extremely high interest to such moneylenders, where the unorganised system is prone to exploitation.

How RupeeCircle is helping the under-banked segment

After ages of suffering at the hands of moneylenders, RupeeCircle was created to solve the credit problem for the under-banked segment and provide them with credit services at affordable interest rates. Rupeecircle is a P2P (peer to peer) lending and borrowing platform where anyone can obtain a loan without the need of having a credit score.

Here is how RupeeCircle is helping the under-banked segment:

RC Score: RupeeCircle’s in-house underwriting team evaluate the loan application using its proprietary credit algorithm and assign a RupeeCircle risk grade (A to F) based on 5000+ data points. An easy way of verification, loans can be obtained from RupeeCircle by the under-banked segment without the need of having a credit score.

Personalized interest rates: RupeeCircle suggests personalized interest rates to each loan applicant as per their RupeeCircle Risk Grade generated by an automated credit appraisal system that uses the personal and financial information to assess risk and understand the credit profile. The assigned interest rate ranges from 12% to 33%.

Quick and simple process: Even when borrowers are eligible to obtain a loan from a bank, some borrowers look for other credit options as the underwriting and verification process of the banks are hectic, overwhelming and time-consuming. RupeeCircle’s loan disbursal process is simpler in the way that the borrower only has to create a loan account with the loan amount being disbursed within two days of verification.

The under-banked segments are the ones who have to suffer because of their inability to create a credit score. Refused a loan by banks, they are charged high-interest rates by moneylenders which they are unable to afford given their unable financial situation. RupeeCircle, through its innovative solutions, is helping to solve the credit problem for under-banked segments in India. By following simple and strategically formed steps, anyone can acquire easy loans as low as Rs 10,000 on RupeeCircle, without having to go through constant bank refusals or lengthy verification processes.

This article is authored by Nikhil Prabhakar, Head of Marketing & Products at RupeeCircle. He is an alumnus of IIM Ahmedabad & ESCP Paris and has 10+ years of work experience across multiple industries like Fintech, IT & Energy. He is an active investor across equity, derivatives, debt and real estate.

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