An online loan site, launched in November by Prime Minister of India Narendra Modi, is now the largest online lending platform in the country.
The site, PSBloansin59minutes.com (PSB59), offers credit of up to Rs 1 crore (nearly $141,225 USD) to micro, small and medium enterprises (MSMEs) in a mere 59 minutes. The platform has also reduced the time it usually takes for funds to be disbursed, from the typical 20 to 25 days to just seven to eight working days.
A recent Credit Suisse report has revealed that the site is now the biggest online lender in the country. In fact, its disbursements have been bigger than those made by two of India’s largest online SME lending sites over the past three years.
“The recently (Nov-2018) launched FinTech portal [PSB59] has, within [four] months, emerged as the largest online lending platform. Loan approvals have already exceeded [Rs 300 billion], and disbursements are estimated at Rs 250 billion,” the report said, according to Financial Express.
Many of the site’s users are existing borrowers that banks have routed through the platform. Out of the 90,000 SMEs that had loans approved, 24,000 are new loan customers, totaling Rs 6,400 crore.
SMEs apply for loans on the site using their GST registrations — since the platform is integrated with the GST server, as well as IT, credit bureaus and banks, enabling the site to quickly score applicants. Borrowers can then select the lender and branch for the “in-principle” approval, which is presented at the chosen branch, along with any other required documentation.
“While the SME lending market continues to be dominated by offline lenders (largely banks with greater [than] 80 percent share), several online models have developed in recent years, which can be broadly classified into lending marketplaces (Bankbazaar, Paisabazaar, Deal4loans, etc.) and FinTech NBFCs (Capital Float, Lendingkart, etc.),” the report said.
This new report came after it was revealed that Indian banks, already struggling with around $150 billion in bad loans, may have to come up with 400 billion rupees ($5.59 billion USD) to cover potential losses from loans that could default from now until September of 2020.