Web portal PSBloansin59minutes.com launched by Prime Minister Narendra Modi three months ago has emerged as the country's largest online lending platform, with loan sanctions exceeding over Rs 35,000 crore. The portal was launched in November to provide the credit of up to Rs 1 crore to micro, small and medium enterprises (MSMEs) in just 59 minutes or less than an hour in a bid to make banking transparent and hassle-free. The platform, designed under the guidance of Financial Services Secretary Rajiv Kumar, has reduced the turnaround time from 20-25 days to 59 minutes. Upon approval, the loan is disbursed in 7-8 working days. The secretary said the automated loan processing system has not only brought in ease but is also helping in fostering transparency.
It has put an end to the discretion at bankers' end as in-principle approval of loans does not require human intervention, Kumar said. "Due to linking of data points, no one can game the system now. There is no scope for information asymmetry. It will also end the era of giving false information like different income statement to banks and tax authorities," he said. MSME units availing the loans have to submit details such as income tax returns, GST data and bank statements to avail the credit facility through this portal. According to a report by global financial firm Credit Suisse, the recently (November 2018) launched fintech portal PSBloansin59minutes.com has, within three months, emerged as the largest online lending platform.
Quantum of loan processing through this portal is much larger than the Rs 6,500 crore of cumulative disbursements by two of the largest online SME lending NBFCs over the past three years, it said, adding that average ticket size (ATS) for new borrowers is Rs 27 lakh and Rs 34 lakh for repeat borrowers. Borrowers then select the lender and branch from the banks willing to grant the "in-principle" approval. This approval is presented at the branch, and after documentation process the sanctioned loan is disbursed. "While the SME lending market continues to be dominated by offline lenders (largely banks with greater 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. Citing an example, the report said, Lendingkart set up in 2014 has disbursed about Rs 1,700 crore since its inception, while Capitalfloat set up in 2013 has disbursed Rs 4,500 crore so far.