The majority of the Indian population lives in rural India. However, the contribution of rural India to the Indian GDP is only 25-30%. This indicates a huge potential in Indian villages, which, if utilised, can give considerable impetus to the economic development of India. One primary reason for the underutilisation of the potential of rural India is the lack of access to credit to its population.
Access to formal credit to rural India is essential as it would allow entrepreneurs and small businesses in these parts to expand their enterprises. It would enable the rural folks to meet their aspirations, such as buying a house or a car, which would further push consumer demand in the economy. It would also save villagers from seeking informal money lending methods that are often exploitative.
Unfortunately, access to formal credit is limited and inaccessible due to the lengthy application process, excessive paperwork, and lack of financial data and collateral. Therefore, it isn't a surprise that the credit gap of India is 330 billion dollars. Considering these factors, Digital Lending comes across as the most viable and suitable method to provide easy access to credit to the underserved and underbanked rural population.
Digital lending uses technologies like Machine Learning and Artificial Intelligence to eliminate time-consuming processes involved in traditional lending. It makes loan disbursal quicker and easier and compensates for the lack of banking services in rural India.
Recently, Spice Money has taken a step forward in this direction by partnering with Tarya, Israel's leading fintech company, to launch a community-based lend-tech platform for rural India. We believe this will go a long way in empowering our brothers and sisters in rural India with financial inclusion and financial freedom.