What is Fintech and how is it changing business lending?

Fintech - short for financial technology - is about making financial services quicker and easier through the use of digital tools. In India, fintech is changing the way businesses access finance.  Instead of weeks - of filling in endless forms and waiting for a decision - businesses simply apply for a loan via the internet, submit their documents using their mobile devices, and get decisions in as little as hours and even minutes.

Fintech lenders assess lending risk by using technology to access transactional data including GST returns, bank statements and alternative data points.  That means small business and start-ups with little or no credit history can access funding too, and there is greater transparency, with businesses being able to track their loan application in real-time and see exactly what fees and interest they will be paying up-front - while also noting multiple repayments and amounts.

Fintechs have better rates compared to traditional bank borrowing as a result of significant disintermediation of a large section of the finance instruction and advisory process which takes place digitally. The organisation facilitating the loan and the business that is applying for a loan both receive their funds faster and get a quicker decision process rather than the traditional pile of paperwork to develop, and reduce the administration. Businesses will also save time in the process as they will not have to coordinate between branch locations or the usual headache of making sure their loan application is not pending and assessed.