SME Lending Based on Payment History is the Next Big Wave in Fintech
One of the companies that was launched in early 2014 to provide operational support, commercial access, and strategic investment for start-ups across the globe has built innovative solutions in financial services and commerce. It has disrupted the traditional brick and mortar by breaking down barriers in the finance sector. ftCash aims to empower micro-merchants and entrepreneurs with the power of electronic payments and loans with zero upfront cost and no monthly rentals. Merchants are able to offer their customers multiple payment methods including credit cards, debit cards, net banking, mobile wallets, PayPal and more. We speak to Vaibhav Lodha, Co-founder, Ftcash, on how well these multiple payment methods fit in Fintech in 2017.
According to Vaibhav Lodha, Co-founder of Ftcash, 2017 is a big year for fintech. “Demonetization and GST have been two of the biggest reforms that the country has ever seen and the activity in the space is unprecedented. Never have I ever seen a government so proactively aiding in policy and products that are changing the landscape of payments space faster than anywhere else in the world. There is a lot of interest from the outside world to understand the impact of key innovations that India like UPI, BharatQR, Aadhar based payments etc and we may see the adoption of some of these solutions globally,” he says.
Nonethless, credit lending is the next big wave of Indian fintech. Lodha explains, “SME Lending based on payment history will be next big wave in fintech. On an active basis, it allows a lender to decide the paying ability of a merchant/business and the recollection of these loans can be done from the payment platform itself. The combination of the payments data along with GST data provides deeper insights into a business. We at ftcash are heavily invested in this idea and believe there is a great potential for scale here.”
Hence, P2P lending will also strategise as an industry. With a lot of progress made in the P2P lending space in India, it’s far from reaching its true potential. “With the advent of likes of Whatsapp, Google etc looking at entering the market, there is a chance of more data points created opportunities in this space. I believe the government has been fairly supportive of the fintech sector overall and has come up with regulations once the pilot projects are ready to scale.”
Another important observation made by Lodha is on the digital economy. “As we are moving towards a digital economy, data theft is going to become a common occurrence and cyber security a practice that every organization will need to adopt. However, while the primary onus will be on organizations, individuals will need to make sure they are ensuring best practices are being followed with respect to encryption, passwords, privacy setting etc to make sure they can protect themselves in case of an eventuality of data theft.”
