Projected low in new-to-credit consumers

According to the 2019 Third Quarterly TransUnion CIBIL Industry Insights Report, for credit cards, new-to-credit consumers dropped to 18.6 per cent, as compared to the 26.2 per cent in Q3 2018. Similarly, for personal loans, new-to-credit consumers dropped to 16.5 per cent in Q3 2019 from 17.3 per cent in Q3 2018.

With the lending process having slowed down in the current scenario, it is expected that these numbers will drop further.

Cautious lenders

The current financial crisis has made digital lending platforms cautious towards new consumers. In an interview with The Hindu BusinessLine, Gaurav Chopra – president of Digital Lending Association of India – said that evaluating existing customers is much easier “while new customers are difficult to assess.”

Even though the demand for credit has gone up during the lockdown, lending itself has slowed down.

Adding to this, major loan aggregators largely focus on customer lead generation. They are ill-equipped to own the entire loan journey and ensure disbursement of loans. Because of this, many consumers are forced to stop the application process halfway.

Credilio understands the urgency

The need of the hour is to provide a technology-enabled distribution platform that connects consumers, advisors and financial institutions. Simply put, what is required is a platform that caters to all income profiles, irrespective of his/her credit history and a channel that is not beautified just by the UX/UI, but by human assistance.

This is where Credilio steps in. From the first ‘Hello’ to loan disbursement, Credilio assures every consumer is assisted throughout the whole journey and assures their end goal is achieved.

For this, the platform ties up with the biggest banks to facilitate the online application of credit. Aiming to offer a seamless line of credit, neighbourhood advisors are appointed to each consumer for assistance till the disbursement of loans. With the platform equipped with products for all income profiles, any individual can now apply for a loan from anywhere and submit the documentation.

During this pandemic, when everyone is looking for an additional source of income, Credilio provides that opportunity as well by inviting professionals to be neighbourhood advisors. The invitation is open to any professional between 25 and 35 living in metros and Tier 1,2,3 towns.

What Credilio does is add that human touch that other digital aggregators seem to have missed.

With the pandemic situation, according to The Hindu BusinessLine, many fintech digital lenders are cautious especially towards new borrowers. In March, a lender gave out only 56 per cent loans of the monthly loan applications they received. This exposes an increasing gap between consumers and digital lenders in India.

An exposé of digital loan aggregators

Let’s have a look at them one by one.

• Lack of human connection

While loan aggregators and digital platforms strive for paperless KYCs and contactless approvals, they forget something in its entirety – the humanness of the entire process. In the case of most loan aggregators, there is no one to help consumers, from comparing different lending products to hand-holding them through the process.

According to an article by Become, digital platforms have enhanced “customer experience through accessibility, accuracy and speed.” However, the lack of human interaction has hindered the experience.

• Rejection is the end of the line

It is common knowledge that small and medium businesses with low or no credit history cannot access loans easily. When they approach digital lending platforms, less than 10 per cent of consumers / MSME owners are able to complete their loan application process. And if applications get rejected by banks, it’s the end of the road. That is until you find another accommodating lending product. The whole process turns out to be time-consuming and nerve-wracking for the prospective borrower.

Other problems in digital lending platforms include complex UX/UI and unsuccessful KYC.

A saviour just in time

This is where a full-service distributor of lending products – such as Credilio – is required. From registration to loan application, from product comparison to loan disbursement, Credilio assures human involvement in each step of the consumer journey.

Each consumer is assigne a neighbourhood advisor who takes the former through the products systematically and thereby making them comfortable about the loan application process.

• The advisors have been trained by the best in the banking and finance fields.
• They track applications real-time, resolve issues with ease and assist customers till loan disbursement.
• By recommending suitable products for a customer based on his/her income profile, the advisor makes sure the applications are not rejected. In the unfortunate circumstance of a rejection, the advisor finds alternate products for the customer.

What Credilio has done is, it has struck a working balance between automation and human involvement in the consumer journey