E-finance firms go Flipkart, Snapdeal way, hope to make getting loans a breezy affair

MUMBAI: E-finance firms are trying to do a Flipkart and Snapdeal, helping the consumer choose the best deals and bringing transactions to a quick close. They are making the loan approval process, a tedious one, easier.

Loan comparison website PaisaBazaar. com recently got a consumer borrow Rs 5 crore without visiting the lender’s branch. The mortgage loan was closed in less than 10 days. Chennai-based Murli Gnanavel got the loan against his commercial property in Coimbatore from Housing Finance Development Corp (HDFC), the country’s largest housing finance company.

When Gnanavel approached the portal, senior executives assisted him, as he was a high-value customer. Later, an HDFC team met him to validate the documents. "Loan was disbursed in just 10 days," said Gnanavel. "You can never know who is selling you and what till you compare online. Everyone claims that he is offering loans at the cheapest rate without explaining all the riders involved."
The check to evaluate the credit profile of the customer has moved online. There are efforts to bring the know-your-customer (KYC) process online too with the help of the e-KYC initiative. "This is helping crunch the approval and disbursal time," said Naveen Kukreja, managing director of PaisaBazaar, a unit of insurance comparison site PolicyBazaar. com. "We will continue to work with lenders to reduce the disbursal time, so that the online platform becomes more effective and a preferred medium for consumers." Kukreja of PaisaBazaar said the Aadhaar unique identification number would facilitate the e-KYC process.

The online portal for comparing rates has grown rapidly. Since its inception in March 2014, it has diversified into home loans, loans against property, credit cards and personal loans. It makes the highest margin by selling personal loans. Average margins on personal loans are 1.5% to 2%, while on home loans and loans against property, they are 0.5-1%. The company makes Rs 2,000-2,500 each by selling credit cards. In the next one year, the company is planning to double its business by selling personal loans worth Rs 600 crore and Rs 1,000 crore of home loans. The portal has partnered with more than 35 financial institutions across different categories. It gets around 20,000 visits a day.

It is now planning to expand into more categories and will be launching other lending products, including gold loans and auto loans, as well as services related to savings accounts and fixed deposits.