Fintech operators in rural areas have been redefining the financial domain to emerge as suitable alternatives of the traditional financial mechanism. Within such gamut of Fintech companies, Peer-to-Peer(P2P) lending companies have been regulated and defined as NBFC-P2Ps by the RBI. In rural areas, the P2P lending market has gained huge traction during the pre COVID-19 times owing to its unique advantage of offering personal loans to individuals in contrast to JLG loans to groups. Within the purview of permissible activities during the nationwide lockdown, the P2P lending business model has emerged as a force of reckoning to aid its customers with continued financial support made available through various digital services like messaging, telephonic calls and multiple options of payments through digital channels.
PaisaDukan, a pioneer of P2P lending in rural areas has completed an year of serving to rural customers in Madhubani and adjoining districts of Bihar. In addition to an extra-ordinary track record of 0% delays & defaults in Grameen loans for last 11 months for the pre COVID-19 times, it has achieved an exemplary success rate of 81% for the EMI collection process in the month of April 2020 even during the unfortunate times of pandemic COVID-19. PaisaDukan has strictly followed the guidelines issued by the government to make sure that it has the right plans and resources in place. During the collection activity, it faced numerous ground level challenges as a result of complete lockdown. To list a few, it varied from no operational customer service points (CSPs) for collection activities, inability of about 15% of its borrowers to access financial services that were stuck in multiple foreign states, limited access to branch banking services, non-availability of public transportation, to zero movement of personal vehicles.
PaisaDukan tackled the situation by efficiently operating at a reduced capacity from its rural contact center in Madhubani district of Bihar and bridged the gap with its remotely available team from Mumbai. Initially, the flow of EMI collection was maintained by urging customers to pay EMIs through online channels already available at their disposal. Simplified links were provided for making the online payments through registered messaging services of PaisaDukan. With efforts of team from Mumbai, PaisaDukan ensured banking services on their fingertips. The ground team ensured assistance to customers by bringing banking services to their doorsteps via card swiping machines, mobile UPI payments, internet banking and digitally available collection end points which were accessible through Paytm and NPCI supported Bharat Bill Payment System (BBPS). The combined efforts of both the remote and the ground team ensured maximum convenience to borrowers. The borrowers who failed in paying the EMIs amidst lockdown have registered full intent of paying the same and have opted for the RBI’s facility of moratorium on EMI payments.
PaisaDukan’s past experience of 0% delays & defaults and its present success in the EMI collection during the unprecedented times of pandemic COVID-19 shows a great potential in the rural lending market. The collection activity has proved high creditworthiness of the borrowers in rural areas while making the rural lending market a credible one. This success is the onset of NBFC-P2P in rural areas and it will be seen as the driver of growth for small businesses, individuals & families seeking financial freedom for a sustainable financial well-being. At the same time, investors will gain more confidence in lending to rural borrowers and rural lending will be counted as a credible investment option in the financial markets.