Tackling operational challenges to drive financial inclusion
Financial inclusion is a crucial step in a country’s economic and social growth. It increases the market depth and gives the financially weak the chance to lead a burden-free future by making them a part of the mainstream financial system, opening doors to obtain loans and create additional streams of income. Fortunately, the Government of India realized the importance of financial inclusion and it created numerous policies related to digitisation. Currently, 80% of Indians have a bank account and have become a part of the financial universe. Unfortunately, a major part of the 80% of the population holding a bank account is still far away from becoming eligible to obtain a loan and channel their savings into future investments.
Financial illiteracy is keeping the underbanked segment (people who own a bank account but are not financially active) away from acquiring a loan. RuppeeCircle, therefore, operates on a robust model to assist this segment to obtain loans, eliminating numerous operational challenges on the way.
Tackling Operational Challenges
RupeeCircle was created to help the underbanked segment in getting a loan without having to go through the trouble of creating a credit score or a financial blueprint. RupeeCircle has introduced strategically-backed, technologically-empowered solutions to ensure smooth underwriting, service delivery and recovery mechanisms. Here’s how RupeeCircle tackles operational challenges to increase financial inclusion and help the underbanked segment:
- House Documentation: Financially inactive customers don’t have updated documents such as their passbook and feel uncomfortable in sharing the financial information or photos pertaining to bank documents. RupeeCircle has its own field team which goes to the houses of potential borrowers to help them with the documentation and let them borrow money with ease.
- Verification simplified: Banks have a credit analysis framework where the borrowers are analyzed based on their financial history. But what about people who get their salary in cash? As banks fail to analyze their credibility, they become ineligible in getting a loan from a bank. RupeeCircle has created a verification mechanism where a potential borrower’s credibility is analyzed based on the timely payments of bills such as water, electricity, etc or whether the person owns an asset, such as a house.
- Anonymity: Many potential loan applicants choose not to borrow from banks, for the fear of a diminished social status. When a loan is taken from a bank, their underwriting team visits their family or office to talk to concerned people in order to receive background information, letting everyone know that they are in need of a loan. RupeeCircle’s field team maintains the utmost anonymity during the verification process and makes sure no one gets to know why the team is there.
- Cash Repayment: Underbanked citizens, such as auto drivers make 10-15 thousand per month in cash. Even if they get a loan from a bank by some means, they can only repay instalments in cash. As banks do not accept cash repayments, RupeeCircle created a repayment framework where borrowers can pay the monthly EMI’s in cash, to be collected by RupeeCircle’s field team.
Financial inclusion is at its peak and expected to increase in the coming years. But the problem with financial inclusion has been its inability to positively affect the underbanked segment and help them in becoming eligible in acquiring credit. RupeeCircle is a peer-to-peer platform where people without a credit score or collateral are provided easy loans. Overcoming each and every operational challenge which are faced by the underbanked segment, RupeeCircle is tackling every credit problem to become the one-stop solution for all of the credit needs.