Money9 Edit | All that is digital isn't gold
Borrowers ought to weigh in properly on the loan conditionalities before signing up
The Digital India proposition enabled a new lending paradigm that boasted of consumer convenience.
Of late, however, these digital lending platforms have come under the scanner due to dubious conditions attached to their offerings.
The Covid-19 second wave has pushed many gullible borrowers further into the lap of these platforms.
There is an urgent need for regulatory supervision of lenders charging exorbitant interest rates. There also needs to be a fair mechanism for dealing with pandemic-induced defaults.
Borrowers ought to weigh in properly on the loan conditionalities before signing up.
Like every activity, money lending too has evolved. But certain traps associated with it still remain.
Digital lending platforms have at one level enabled financial inclusion by improving access and easing the collateral quotient and accompanying paper work. But trust, which is the cornerstone of a relationship between a lender and borrower, has at times been compromised.
They have expanded the capital disbursal ecosystem at the bottom of the pyramid. But with growing business, vested interests have manipulated the core business model.
Covid-19 has eroded savings of many citizens, forcing them to take loans at steep interest rates.
Many platforms are exploiting prevalent ignorance among customers related to terms and conditions. In haste and desperation, customers should not get carried away by easy money on offer.