Monday, August 21, 2017

HappyLoan – to facilitate dreams come true

Partner for Indian MSME industry - ArthImpact
#happyloan #digitalloans #paperlesss loans #arthimpact
Financial services in India is witnessing a significant growth in the area of investments and lending. The avenues and the methods are increasingly getting easy and affordable with digital disruptions. Start-up ecosystem of India is contributing significantly to this revolution. One of such revolution I would like to talk here about is digital lending to the unserved population of India.

‘Digital lending’ concept initially began with lead generation, now is evolved to complete end to end paperless solution. One of the pioneer of this segment is “Happy Loans”, launched to address the needs of small businesses, they lend from Rs. 2000 to 1 lakh with flexible tenure and an attractive rate of 2% per month which is almost at par with the personal loans provided by Banks and much better than informal lending. “Happy Loans”, a micro-lending initiative of #ArthImpact, a self-funded start-up by Mr. Manish Khera and Gautam Ivatuary. HappyLoan mostly served the un-served and underserved Indians. They have taken up alternate channels and method to determine the repayment capacity of individuals. “Happy loans” is a microfinance initiative with presence in 100 cities in India, also helps borrowers building a credit history by disciplined repayment approach.

Manish Khera is known to be a serial entrepreneur, and one of the early movers in financial inclusion and digital banking. Manish Khera’s two decades of corporate journey began at ICICI Bank, where he played a crucial role in setting up the institution’s Alternate Channels Group, after which he moved on to found FINO Paytech in the year 2006, which has served over 70 million customer. He then joined Airtel Payments Bank as CEO. Through his journey of banking, he realized the demand gap for lending to customers with formal credit history and steady income source is huge. The acquisition cost of Banks is too high to address the small borrowers. So, to address the need of these 600 mn people who do not have access to mainstream credit facility in India, he launched Arth Impact. The organization is bound by its vision of financial inclusion. Arth Impact is more focused towards a solution that could ease the everyday cash flow problems.

The attractive features and benefits of Happy Loans are as follows-
·       Lends Rs. 2000 – Rs. 1 lakh ( for ex - you may take the loan to re-do your shop/ buy some new items)
·       Flexible tenure of repaying the loan beginning 30 days
·       Loans are disbused within few hours
·      No physical filing of documents required
·      Complete end to end digital process to seal any leakages
·      Low cost, as the complete lending is digital, minimizing the operational cost
·     Customer without credit history, can build credit history by taking loan from Happy Loan
   Moneystreets Take – Besides structured microfinance Industry, Arth Impact promoted “Happy Loans” stands out with its low cost structure, easy interest repayment, and flexible tenure makes it a convenient option. The background of the promoters is credible and note-worthy which ensures a superior experience. With end-to-end digital solution, it is new-age product with best experience for the customers.

#happyloans #digitalloans #paperlesss loans

Saturday, August 5, 2017

Loans are not bad, we need to be responsible with it

#Loan and the peril of the compounding

The topics on savings and investing through various means and modes have become quite popular, thanks to the conscience of regulatory bodies and growing numbers of personal finance experts. Before we go into any other diacussion, we need to appreciate that Indians are known for their savings habbit with more than 30% of their income goes into savings. In Investing, wide range of financial products have been introduced through last three decades. Mutual fund industry alone trebled their assets under management with Indian retail investors in last decade. Concept of SIP and power of compounding is already doing the magic. However, the overall financial behavior is yet to mature. 

The term "risk" doesnt go well with our especially middle class elders. The younger generation however are more experimental given their high disposable income and less family responsibility and small family structure. In last 100 years Indian economy  has gone through massive change, so is the socio-economic behavior. But due to lack of adequates and inherent orientation, the new earning fraternity is often found clueless and spoilt for choice on the financial front. 

Loan is one of those frowned terms in Indian households as the equity investing has been. Thanks to evergrowing mutual funds industry, it has turned around the conservative indian investors by beating market returns and with superior offering. But, loan is still a forbidden word owing to our paternalistic regulators and still conservative experts. Its high time, that we look at Loan more rationally. This is not neccesarily an evil. The evil is caused because of irresponsibility, which is result of low or no understanding of the product. Loan as a financial instrument is one of the oldest financial products in the world. If we have to define loan in simple terms, when we are depositing money in the bank, we are lending our money to bank and bank in returns is giving us predecided interest depending on the tenure. Same way bank lends out with a predecided term and interest rate. The difference is bank being a large institution with huge establishment and loan repayment capacity, it offers us lower interest when we lend to the bank and it charges a higher interest rate from the customers, as it runs higher risk on its capital by lending to individuals. 

Decade ago things were little different. Especially India had a practice of "sahukar", the informal lending channel, which ruined many households with malpractice for centuries. The trauma and fear has been carried as burden by generations. Even post independence, untill 1990s, the interest rates were very high in the banks and with the compounding effect, cost of loan was very high. But, with lowering the interest rates and competitive environment, loans are available at much lower cost. 

However, no way I mean that one should take a loan without any rhyme or reason. The way investment has a purpose, loan should be taken 1. If it is absolutely neccesary 2. You have enough money to pay and just want to ease the cash crunch. Lending beyond repayment capacity will create huge trouble.

The way investing early is applauded because of power of compounding, for loans it is exactly opposite, we may call ot as "peril of compounding". If one misses out loan repayment instalments, the interest would be added to the outstanding amount and the interest will be calculated on the whole outstanding ruther than the principal in the next instalment onwards.

Given all the facts, India is waking upto the reality of modern financial system of the world, and doors have opened for new age loan products especially in the personal loan space like peer to peer lending, short term small loans lending, credit line addition to our ever evil Credit Cards. Thanks to prudent approach of RBI and CIBIL history, loan industry is well regulated. In all likelyhood, loans will be mire accepted product and will be used very responsibly by us