Kashi Project: Fintechs, DBT data key for small loans to the poor | Business News in India


BENGALURU: The main Indian fintech startups would play an essential role in the Kashi (cash over internet) project, which is under consideration by the Prime Minister, to provide quick loans at low prices to farmers, workers and families in low income to cope with the cash crisis caused by the Covid-19.
FinTechs are looking to create a platform using Direct Profit Transfer (DBT) data and other available information such as demographics and loan history of microfinance institutions that will help assess creditworthiness and issue loans directly to bank accounts in 10 minutes. NITI Aayog, the government’s policy think tank, is also actively involved in the discussions.
Leading entrepreneurs, who attended a review meeting with Prime Minister Narendra Modi on Friday, told TOI that DBT could be used significantly to disburse loans, based on the monthly payments people receive and that the same can be deducted over a longer period in installments after the Covid-19 Crisis. These loans could concern individuals or street vendors, garage owners, among others, who are facing a capital squeeze triggered by the stoppage of their work. While the outlines are still being finalized, these loans could be anywhere between Rs 30,000 and Rs 60,000, those present at the meetings said.
“People benefiting from DBT facilities do not necessarily have easy access to bank capital and institutions are also cautious in terms of recovery, especially now. This platform will contribute to data access and a very low recovery cost – an important factor for fintechs, ”said one of the people present at the meeting. he is keen to leverage technology to enable low-cost, hands-off lending without risk of fraud. For the current fiscal year, the total DBT (in cash and in kind) is over Rs 81,000 crore with over 60 crore beneficiaries so far, according to government data.
“It will be an application-based platform. We would be able to sanction a loan in five minutes. The Aadhaar card will be an important identifier for this. From an implementation point of view, apart from data sources, there will of course be collaborations with banks. Initially we were going to lend and with a better recovery and more confidence in the program, financial institutions, starting with public sector banks, would also give loans, ”said Ranvir Singh, co-founder of Kissht – a loan startup.
He was one of the attendees along with PhonePe Co-Founder Sameer Nigam, Pine Labs CEO Amrish Rau, Ashish Kashyap (former Goibibo Founder – now IndWealth) and NPCI Managing Director and CEO Dilip Asbe. Singh added that in the long run, options such as adding a beneficiary (for loans) and health insurance can also be explored.
To extend the reach of other financial products like insurance, fintechs have proposed KYC Setu, which will serve as a repository for existing KYCs, which would eliminate the need to redo KYC to purchase new insurance amid the pandemic. “It’s a major problem to do KYC every time to buy insurance or mutual funds. KYC Setu will help you with existing KYC data with banks. The government is proactive here and wants to build an India-made platform to overcome obstacles in the midst of Covid-19, ”said another person participating in the discussion.

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