Empowering Financial Inclusion and the Role of Digital Lending in India's Economic Growth
Dr. Manoranjan Mohanty is a visionary entrepreneur and dynamic finance professional, who is famous for his business due diligence, brand valuation and NPA’s resolution skills. With experience across fintech, education, real estate and e-Commerce he has managed to create employment for over 500 people. The transformation of communities is his passion for honest financial practices and excellent customer experience while his strategic vision is inspiring the future generation of entrepreneurs with a purpose. As a recognized believer in the thinking, innovation, and emotional intelligence, he strives to inspire greater values of transparency, integrity and social accountability.
In a recent interaction with Snigdha Das, Correspondent at siliconindia, Manoranjan Mohanty shared his insights on ‘Empowering Financial Inclusion and the Role of Digital Lending in India’s Economic Growth’
Digitalization is changing the face of India’s financial ecosystem to be a catalyst of economic empowerment especially among the marginalized rural population. The magic lies in digital platforms providing financial services and opportunities previously constrained to urban geographies. This revolution is pivotal in closing the financial divide between urban and rural communities, making financial tools and services more democratic.
Empowering Rural India with Digital Finance
Although urban areas of India enjoy developed financial services, the rural areas are saddled with such challenges as lack of infrastructure for banking (financial literacy) and lack of access to essential financial products. Electronic channels, in particular online lending and mobile banking, are filling these voids. Rural citizens now use their smartphones as a portal to obtain financial products earlier restricted to cities. With negligible documentation, rural citizens now use smartphones to receive services of banks and NBFCs, eliminating the disparity between financial inclusion of urban and rural regions. This shift allows rural citizens to have cash in hand instantly and on their own schedule, economically empowering them.
However, small enterprises, especially from rural and semi-urban areas,struggle to access regular financial services. Traditional loans have high interest costs, long delays in approval, and high levels of documentation the long process proving cumbersome for business entities that need capital in short order. Many times, small businesses have to endure an unpleasant and bureaucratic delay when applying for a minor loan via usual financial institutions. Digital lending platforms offer a very much needed solution. They enable small business owners to apply for loans within minutes on their smartphones. The process is made easier with fewer documents and faster approval. A small shop owner can easily access Rs 20,000 to Rs 30,000 quickly for restocking that would take forever through normal lending avenues. This streamlining enables small enterprises to grow faster, thus improving on their capacity to survive in competitive environment.
Impact of Digital Lending on India’s GDP
New technological advances, such as AI, blockchain, and data analytics, are simplifying the digital lending procedures and enhancing efficiency, security, and risk valuation.AI enables credit scoring through analysis of vast amounts of data to establish the creditworthiness of borrowers, even those with no or limited historical credit. Blockchain enables secure and transparent financial transactions, making the lending process more reliable. Data analytics predicts defaults on loans and maximizes lending practices by recognizing trends and patterns. Such technologies not just make lending more efficient but also facilitate that monies are deployed in people and entities that can and actually pay, minimizing risks to financial institutions.
Digital Lending is also playing a vital role in the economy of India. The industry has increased by ten times over the past few years, boosting the nation's Gross Domestic Product (GDP) in a positive way. Online loans help businesses acquire funds to buy stock, increase operations, and enhance infrastructure functions that directly enhance economic growth. The money paid via online platforms also flows into the economy. Whether it is a small enterprise buying raw materials, a salaried person paying medical expenses, or a student paying tuition fees, every transaction drives consumption, production, and services. These activities, in turn, lead to GDP growth. Furthermore, by increasing the availability of credit, online lending platforms are also fostering financial inclusion. More businesses and people are becoming part of the formal economy now, connecting the urban and rural segments. It encourages inclusive growth, enabling marginal communities and bringing new opportunities.
Enabling Digital Entrepreneurship and Rural Communities
Digital inclusion is fostering entrepreneurship in rural areas, enabling individuals to explore opportunities in e-commerce and digital services. Nonetheless, with the growth in entrepreneurship, traditional job creation is still limited because of overdependence on automation and AI in digital platforms. Thus, digital entrepreneurship is booming.This calls for the significance of digital literacy and skill acquisition to enable people to effectively utilize and navigate digital platforms. For marginalized segments, like women and rural communities, digital inclusion provides a means to access the digital workforce or create entrepreneurial opportunities for themselves that were out of bounds in terms of geographical and cultural barriers. Notably, government policies and digital literacy programs are crucial to enable these segments to succeed in the digital economy.
Collaboration between government initiatives and digital lending platforms is essential to enhance access for individuals with limited digital literacy or informal credit histories. Efforts made by the government, such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the one for financial literacy have been successful in taking digital financial services to the rural population. But for these programs to succeed there must be continuous support and trainings for individuals to understand and utilize these digital platforms. Such local leaders, community based organizations, and financial literacy programs can make a difference in bridging this gap to make sure rural folk do not get left behind in the digital revolution.
Conclusively, the Digital transformation India is hopeful. Digital lending, AI, blockchain, and data analytics will continue to be a driving force in the finance sector. These technologies shall accelerate financial inclusion, economic growth and empower the marginalized sections. In the short term, the country can look forward to seamless integration between technology and routine financial transactions, and hence the financial ecosystem more inclusive, more efficient, and more transparent. The transformation cannot be avoided and it will change the financial scenario of India for succeeding centuries.
.jpg "Dr. Manoranjan Mohanty, Director, ATD GROUP ATD FINANCIAL SERVICES PVT LTD")
In a recent interaction with Snigdha Das, Correspondent at siliconindia, Manoranjan Mohanty shared his insights on ‘Empowering Financial Inclusion and the Role of Digital Lending in India’s Economic Growth’
Digitalization is changing the face of India’s financial ecosystem to be a catalyst of economic empowerment especially among the marginalized rural population. The magic lies in digital platforms providing financial services and opportunities previously constrained to urban geographies. This revolution is pivotal in closing the financial divide between urban and rural communities, making financial tools and services more democratic.
Empowering Rural India with Digital Finance
Although urban areas of India enjoy developed financial services, the rural areas are saddled with such challenges as lack of infrastructure for banking (financial literacy) and lack of access to essential financial products. Electronic channels, in particular online lending and mobile banking, are filling these voids. Rural citizens now use their smartphones as a portal to obtain financial products earlier restricted to cities. With negligible documentation, rural citizens now use smartphones to receive services of banks and NBFCs, eliminating the disparity between financial inclusion of urban and rural regions. This shift allows rural citizens to have cash in hand instantly and on their own schedule, economically empowering them.
However, small enterprises, especially from rural and semi-urban areas,struggle to access regular financial services. Traditional loans have high interest costs, long delays in approval, and high levels of documentation the long process proving cumbersome for business entities that need capital in short order. Many times, small businesses have to endure an unpleasant and bureaucratic delay when applying for a minor loan via usual financial institutions. Digital lending platforms offer a very much needed solution. They enable small business owners to apply for loans within minutes on their smartphones. The process is made easier with fewer documents and faster approval. A small shop owner can easily access Rs 20,000 to Rs 30,000 quickly for restocking that would take forever through normal lending avenues. This streamlining enables small enterprises to grow faster, thus improving on their capacity to survive in competitive environment.
Impact of Digital Lending on India’s GDP
New technological advances, such as AI, blockchain, and data analytics, are simplifying the digital lending procedures and enhancing efficiency, security, and risk valuation.AI enables credit scoring through analysis of vast amounts of data to establish the creditworthiness of borrowers, even those with no or limited historical credit. Blockchain enables secure and transparent financial transactions, making the lending process more reliable. Data analytics predicts defaults on loans and maximizes lending practices by recognizing trends and patterns. Such technologies not just make lending more efficient but also facilitate that monies are deployed in people and entities that can and actually pay, minimizing risks to financial institutions.
Digital Lending is also playing a vital role in the economy of India. The industry has increased by ten times over the past few years, boosting the nation's Gross Domestic Product (GDP) in a positive way. Online loans help businesses acquire funds to buy stock, increase operations, and enhance infrastructure functions that directly enhance economic growth. The money paid via online platforms also flows into the economy. Whether it is a small enterprise buying raw materials, a salaried person paying medical expenses, or a student paying tuition fees, every transaction drives consumption, production, and services. These activities, in turn, lead to GDP growth. Furthermore, by increasing the availability of credit, online lending platforms are also fostering financial inclusion. More businesses and people are becoming part of the formal economy now, connecting the urban and rural segments. It encourages inclusive growth, enabling marginal communities and bringing new opportunities.
Digital inclusion is fostering entrepreneurship in rural areas, enabling individuals to explore opportunities in e-commerce and digital services.
Enabling Digital Entrepreneurship and Rural Communities
Digital inclusion is fostering entrepreneurship in rural areas, enabling individuals to explore opportunities in e-commerce and digital services. Nonetheless, with the growth in entrepreneurship, traditional job creation is still limited because of overdependence on automation and AI in digital platforms. Thus, digital entrepreneurship is booming.This calls for the significance of digital literacy and skill acquisition to enable people to effectively utilize and navigate digital platforms. For marginalized segments, like women and rural communities, digital inclusion provides a means to access the digital workforce or create entrepreneurial opportunities for themselves that were out of bounds in terms of geographical and cultural barriers. Notably, government policies and digital literacy programs are crucial to enable these segments to succeed in the digital economy.
Collaboration between government initiatives and digital lending platforms is essential to enhance access for individuals with limited digital literacy or informal credit histories. Efforts made by the government, such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the one for financial literacy have been successful in taking digital financial services to the rural population. But for these programs to succeed there must be continuous support and trainings for individuals to understand and utilize these digital platforms. Such local leaders, community based organizations, and financial literacy programs can make a difference in bridging this gap to make sure rural folk do not get left behind in the digital revolution.
Conclusively, the Digital transformation India is hopeful. Digital lending, AI, blockchain, and data analytics will continue to be a driving force in the finance sector. These technologies shall accelerate financial inclusion, economic growth and empower the marginalized sections. In the short term, the country can look forward to seamless integration between technology and routine financial transactions, and hence the financial ecosystem more inclusive, more efficient, and more transparent. The transformation cannot be avoided and it will change the financial scenario of India for succeeding centuries.
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