By Mehak Srivastava
The digital lending industry in India is witnessing rapid growth, driven by the increasing demand for credit from various segments of the population, especially the underserved and unbanked. Reports suggest that India’s digital lending market is projected to reach $515 billion by 2030, up from $38.2 billion in 2021, with a compound annual growth rate (CAGR) of 33.5 percent.
AI and data science for credit assessment
Digital lending struggles because it’s hard to evaluate the creditworthiness of potential borrowers, especially if they’re new to borrowing or lack a credit history. The usual ways of checking, like credit reports and bank statements, might not show the full picture. That’s where AI and data science can help. It uses diverse sources like social media, phones, online transactions, behavioral patterns, and psychometric tests to understand more about a person’s money situation and predict if they can repay a loan. AI and data science use fancy techniques like machine learning to analyze all this information.
When digital lending platforms use AI and data science, they can make better decisions about who should get a loan. This means fewer people will fail to pay back loans, more people will get approved, and loans can be cheaper. AI and data science also make the process faster because they can look at the information in real-time, without lots of paperwork.
AI and data science for credit disbursement and collection
Another major challenge the digital lending industry faces is the inefficiency and inconvenience of the credit disbursement and collection process. Traditional methods of disbursing and collecting credit, such as cash, cheques, or bank transfers, involve high operational costs, delays, and risks of fraud and theft. AI and data science can help to overcome this challenge by enabling digital and seamless modes of disbursing and collecting credit, such as mobile wallets, UPI, QR codes, or biometric authentication.
Digital lending platforms can offer more convenient and flexible credit disbursement and collection options with the use of Artificial Intelligence and data science resulting in improved customer experience, loyalty, and retention. It can also help to reduce the operational costs, risks, and losses associated with the credit disbursement and collection process, by minimizing human intervention, errors, and fraud.
The Gold Loan Industry
The gold loan industry, deeply connected to our traditions, is using technology to meet the changing needs of customers. AI and Data Science are playing a big role in making gold loan processes more efficient and clearer. One notable application is the estimation of loan amounts against gold assets. AI-powered tools/calculators consider various factors such as purity, weight, loan amount, duration, etc. to provide customers information related to the loan amount, and interest payable monthly and annually helping them make informed and quick decisions. For instance, the SahiBandhu Smart Gold Loan Calculator is used to estimate how much money a customer can get for the gold. It considers things like purity, weight, loan amount, and duration to give you the estimated loan amount, and interest payable monthly & yearly. This helps customers make quick and informed decisions.
Data analytics helps lenders understand what customers want, so they can make gold loan products that fit their needs better. This personalized approach makes customers happier and more loyal, which is important in a competitive lending world. At SahiBandhu, the biggest gold loan platform, we use advanced technology like customized CRM to get new customers, machine learning and visualization tools to understand what customers like, and analytics to make smart decisions every day. Our product recommendation engine, powered by our special machine-learning model, helps us suggest the right gold loan product for each customer.
Furthermore, Natural Language Processing (NLP) is used to improve how customers interact. Chatbots and virtual assistants, powered by NLP, offer quick and personalized help to borrowers, making the loan process easier. The introduction of AI-based tools like Automated Pawn Machine (APM) and gold wallet facilities improves customer experience and cuts operational costs for lenders. Artificial Intelligence and Data Science are changing India’s digital lending and gold loan industries, streamlining processes, promoting financial inclusion, and fostering innovation.
The author is head, marketing SahiBandhu
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