Rang De innovates: Overcoming our borrowers’ challenges with digital lending

May 4, 2019
By Rang De Team

 

Over the last 11 years, we, at Rang De have been tirelessly working towards the vision of a poverty-free India. To comply with the Reserve Bank of India (RBI) regulations, we are building a brand new P2P platform while staying true to our social mission of alleviating poverty. The mandate has required us to undergo many operational changes that have been challenging to implement with our borrower communities.

One of the mandates set up by RBI for a P2P is the digital disbursal of loans and collection of repayments. While we walked a tightrope through this transition, we never shied away from the complexities of disbursing loans and collecting repayments digitally from our communities. While there has been a push towards a Digital India, this still rendered to be a challenge as banks remained inaccessible to many communities. Numerous other problems stemmed out of this roadblock of accessibility, including a feeling of security in dealing with cash, mistrust in banks and banking facilities, and not wanting to go digital. Given this scenario at the community level, digitization seemed like a distant dream.

This, however, did not deter us from our mission. We realized from our experiments and experience with Swabhimaan that the community members would go out of their way to not only access the banks but also go digital if they saw its relevance in their everyday life. These challenges suddenly seemed like an opportunity to replicate our learnings from Swabhimaan with the help of our partners. We hence began to look at financial literacy and tools of behavior change in addressing the challenges that we were facing with digitization. The financial literacy content was curated to cater to the community’s need. Through the financial literacy training, we looked at bringing home the applicability and relevance of ideas like digital banking, credit scoring and need-based borrowing.

While accessibility still remains a problem, we are constantly looking out for solutions that could reduce friction and ease the shift towards digitization. We have been taking steps towards providing access to low cost customized credit for the past 11 years. We are now taking big steps towards making wholesome financial inclusion, a reality for our community members.