Multiple Benefits Assured from Lender Registration at Loan Platforms

To encash the booming demand for fiscal credits in the social and economic/business segments, independent platforms have come up that serve as the intermediaries between the lenders and seekers of loan products. These platforms have been set up as the online portals that connect the people who are willing to pledge their funds against the demand put up by a loan customer. The portals often run lender registration campaigns from time to time to add more members, particularly the lenders; while the loan customers automatically congregate with their requests at the leading loaning portals. These loaning mechanisms have been doing a great job while augmenting the traditional lending agencies (banks & NBFCs) and their loaning services. However, the emergence of such peer to peer loan systems is more driven by benefits in favor of the lenders who could garner good profits through agreed interest rates with the loan customer. By registering with the portal as a lending member, the benefits could be ensured and the process of registration has been kept simple yet very authentic; so that there are no gaps and lacunae left to catalyze any fraud or defaulting possibilities. The major benefit of becoming an independent lender with any loan mechanism is that optimized exposure is generated. This offers the nascent viability to begin as a lender; which could not have been possible without an established & standard framework.

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Fiscal Credit

Registered lenders get vital benefits

Aligning as a registered lender on a loan platform has more benefits for those who wish to engage in investment loans or other forms of generic lending activities. The portal also does the background checks and acts as a buffer to keep the loaned sum secure; such that the investor is guarded against any ill motives or defaulting or others. The portal generally also facilitates the sophisticated yet safe account management services and this extends to the direct online payments (like interest and principal) to the accounts of the beneficiary and lender.

Lender Registration Campaigns Propel Economic Development

The economy is expanding fast and loans could be called as the important vehicle to catalyze the expansion process. All the social dwellers and households are not at par in terms of earning capacities and a significant proportion of the social matrix is devoid of the resources to live good and prosper fast! Loans change this fundamental reality by offering the fiscal credit to the seekers; who could be those ordinary people and families that are wishing to buy a couple of consumer electronics to better their life or those who are inspired by a business idea of real worth and seek the fiscal assistance to get into the boots of an enthusiastic budding entrepreneur! The macroeconomic thought and counsel is that why not work to eliminate the constraints for these aspirants; because doing so would propel the consumerism and also boost the entrepreneurial pursuits and viabilities. Lender Registration Campaigns are initiatives that are aimed at furthering the loaning services. The only difference is that here the loans are made available through channels that run from peer to peer; rather than from banks to people. Many portals have been set up to act as the intermediaries and the platform that these offer bridge the gaps between those who are willing to offer the investment loan and those who seek the same.

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Standard Lenders

Peer to Peer Loaning Platforms Securing Synergisms

Lender Registration Campaign is a sort of marketing initiative that the intermediary portals take up to boost the population of their platform with more numbers of lenders of worth. Such campaigns when successful achieve vibrancy and act towards securing the vital synergisms between the lenders and seekers of loans. Such lending mechanisms have found demand in the social economy because of the crunched outreach of many people to the established Standard Lenders like banks and NBFCs. On the other hand, these lending platforms complement brilliantly the existing lenders’ infrastructure so that a better output is delivered on a broader scale.

Banks Adopting Competitive Service Portfolios through Zero Prepayment Fee and Collateral Free Loans

Loans today constitute the basis of credit based economic model that has got prominent in most of the nations in developed and developing world. Despite the dangers manifested in such an economic model through the recent financial downturn in the North America and Europe, the approach is being accepted as a worthy one; while the economists blame the faulty lending policies of the institutions that led to the plunge! The governments, especially in the developing world are still pushing for the loan products of diversity while the regulatory and overseeing agencies are ensuring the facilitative frameworks to further the loans to the needy; so that economic catalyses are retained. RBI in 2012-2013 monetary policy asked the lenders to shun the practice of prepayment penalty and adopt the healthy and competitive practice of Zero Prepayment Fees in the home loans. RBI expressed optimism that such change would usher more transparency and a level playing field in the lending sector and establish a healthy competition. Earlier, the banks used to levy a penalty in the form of processing the charge for the early closure of the home loans.

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Zero Collateral Loans

The collateral free loans propel consumerism and are highly popular!

The loans market has been witnessing many interventions in the past two decades as a mark of transparency, competitiveness, market broadening and other initiatives of worth and relevance. The Zero Collateral Loans are such products that have got popular in the social domains. These are generally unsecured loans of mid and small denominations that are offered for purchases of diversity. These purchases generally belong to the consumerism domains; like the buying of home electronics, personal vehicles (cars, two wheelers) and such others products of direct utility. In the agrarian sector, unsecured collateral free loans are available for buying on farm machinery, farm irrigation systems, green houses and such other assets that directly impact productivity positively. While the amount of such loans is less, in most cases, the lender assesses the creditworthiness to ensure that there would be no defaulting!

What are the criteria by Bank for setting business loans for the budding entrepreneurs?

Loans have been adopted as an important vehicle of synergizing growth and development activities in the economy because it generates the line of credit for the one who has a plan of action but lacks the resource to fructify the plan! The governments have been therefore pushing for the efficient yet healthy loan policies in their budgets so that more entrepreneurs are bred in the social economy. However, the question of feasibility of the plan in hand always needs to be assessed and the lending agencies like banks and finance companies are pretty adamant on this; so as not to accumulate NPAs (non-performing assets).

To generate objectivity, banks often set the eligibility criteria in the form of threshold like turnover more than 2 lakh and minimum 6 months of business operations as a viable entity! Such criteria (which may differ from one to other agency) lends objectivity to their loan desk and also ensures that any undeserving person do not get a loan! It also in one way acts as the precautionary step to limit the bulk of NPA of the bank because if a person without merit secures the Business Loan then the chances of defaulting would be very high.

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Business Loan

Helping the Deserving Entrepreneurs

A general criteria of turnover more than 2 lakh and minimum 6 months of operational presence means that the entity is a viable one and seeks more resource towards expansion. The bank officials assess the application from scratch each time after arriving at any decision regarding granting loan or not! However, this also means that the person needs to kick start his operations on his own and only after displaying merit of his business, can he avail the loan from the bank! On the other hand, this also represents the balanced equation wherein the bank is assured of least possibility of defaulting and the budding entrepreneur also gets Financial Assistance.

MSME loans serving as vital financial instrument for business empowerment and viability

The economic spectrum is expanding fast due to the new business banners that are getting viable each year and also due to the differentiation of verticals & resultant specializations. However, amid all this fanfare, the smaller firms feel the constraints to move briskly and for some there is even a grave challenge to remain viable viz a viz tough competitor that are the big banners of sector! This situation is very critical and therefore the startups and Business Entities in the MSMEs sector (micro, small, medium enterprises) keep struggling; failing which many are lost beyond oblivion! To reverse such difficult operational dynamics of the smaller firms, MSME Loan Services have been developed and in most countries, these are supported/subsidized by the government departments! MSME Loan is generally a small to moderate quantum loan that, in most cases, does not warrant the collaterals from the seeker. The interest rate is also kept minimum (because of subsidies). Such conditions make the loans attractive for the smaller companies that are crunched in their financial portfolios and looking for the assistance.

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MSME Loan Services

Seeking MSME loans –

MSME Loans Lending is done by the banks that generally assess the viability of the idea that is sought to be funded. The onus is on the seeker to prove to the banking officers that the project is feasible and would bear results in a short term! More practically, the MSME Loaning is generally directed to those initiatives that have been already tested as good and fruitful. Apart from seeking a loan for setting up a new small venture, the one sought for expansion is easier to get! The entrepreneur can put up his balance sheets and a growth plan that helps him get his loan approved. The easiest way could be to get assisted by a specialist agency that escorts throughout the process till the loan is finally approved.