In the formal debt financing segment in India, there is a huge credit gap. Credit gap can be defined as the unmet credit requirement of MSMEs, over and above the available access to credit from formal institutional sources of finance.

“New-age digital lending companies are addressing this unfulfilled credit requirement of the nation, and have built a strong foundation for their growth by catering to an existing demand and empowering an excluded but credit-hungry segment of the population,” said Rajat Gandhi, Founder and CEO of Faircent, a peer-to-peer lending platform.

He added that new technologies such as AI and Big Data are also helping the industry replace traditional credit records as a qualifier to determine the lending risk.

However, it is important to note that growth is riding mainly on the gap created by the conventional banking system.

The fintech revolution has changed the entire interface of transactions in India. Whether it’s payment or insurance or mutual funds or loan disbursement, the entire financial system is linked to technology now.

Emphasising the role of technology, Gandhi of Faircent said that various channels such as websites, mobile applications and tech-driven processes like eKYC have added considerably to the competencies of the online lending sector.

“We extensively leverage automation to create superlative value for users and drive an unparalleled lending experience on the platform. The auto invest feature is one such innovation. It matches a lender’s investment criteria with the borrower’s requirements and sends proposals on behalf of the lender to the borrower,” he said.

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