The number of startups that have emerged in the burgeoning fintech lending space has increased noticeably in recent years. These fintech platforms provide instant loans, revolving credit lines, and other credit instruments to customers who are underbanked, unbanked, or new to credit.

The seamless service they provide is the reason for their rapid growth. Fintech lenders offer loans ranging from Rs 5,000 to Rs 10,00,000. (upper limit varies). Rather than providing standardised offerings, they cater to the specific needs of various customer segments such as millennials, salaried employees, local business owners, retailers, credit card customers, new to credit customers, low bureau score customers, and many more.

They have even introduced new credit options such as EMI without a credit card, Buy Now Pay Later (BNPL), and e-commerce voucher financing to make buyers’ lives easier while also transforming the concept of e-commerce in general. However, there are still some reservations in India about the use of such digital lending platforms.

Finance and technology convergence paved the way for many private financial institutions to launch digitally innovative financial products. The introduction of fintech improved the user experience by facilitating payments, lending, and savings on digital platforms such as private apps and official credit websites.

Read More FINTECH Startups in India

How does FINTECH work?

Fintech is not a new industry; it has simply evolved at a rapid pace. Whether it’s the introduction of credit cards in the 1950s or ATMs, electronic trading floors, personal finance apps, and high-frequency trading in the decades since, technology has always been a part of the financial world to some extent.

The heart of financial technology differs from project to project and application to application. However, some of the most recent advancements use machine learning algorithms, blockchain, and data science to do everything from process credit risks to run hedge funds. Indeed, there is now an entire subset of regulatory technology known as “regtech” that is designed to help industries such as, you guessed it, fintech navigate the complex world of compliance and regulatory issues.

Concerns about cybersecurity in the fintech industry have grown in tandem with the growth of fintech. The massive growth of fintech companies and marketplaces on a global scale has increased the exposure of vulnerabilities in fintech infrastructure, making it a target for cybercriminal attacks. Fortunately, technology is constantly evolving to reduce existing fraud risks and mitigate emerging threats.

Myths & Facts about Fintech Leading Apps

App-based lending is promoted by financial institutions and NBFCs in India, and this fintech concept has been actively accepted by many borrowers in India who require immediate finance for a variety of reasons. However, there are some facts and myths surrounding fintech unsecured lending. Let’s dispel some myths and facts about digital lending in order to conduct safe financial transactions online:


1. Faster Returns: While digital lending services are faster than traditional ones, lenders do not guarantee faster returns. The operational efficiency of the loan applications is entirely responsible for the company’s success and profits. Launching new digital lending apps and expecting guaranteed profits in the early stages can be a difficult task.

2. Location Restrictions: Instant personal loan apps promise quick loan application, approval, and disbursement from anywhere, at any time. However, this does not appear to be the case in locations where borrowers’ bank accounts are held by regional and cooperative banks, causing problems with loan disbursement and repayment.

3. Unlimited KYC Authentication: For borrowers, paperless verification of KYC documents is extremely convenient. With a limited database, it is difficult to manage the rush once the loan app is launched and traffic begins to populate the app. India is a large country with a large population. Due to the limited database to stack the KYC details, when many users submit their KYC details for verification on the loan app, the loan applications are frequently dropped. As a result, the notion that fintech allows for unlimited KYC authentication is a complete myth.


1. Smart experience better than banks:  Fintech has improved the level of user experience supporting top-end financial services digitally – corporate banking, private banking, crowdfunding, trading, and lending. Digital wallet platforms such as Google Pay, Paytm, and PayPal have emerged as an easy source of online payment by partnering with fintech.

2. Quality Control: Fintech firms are ideal for calculating credit scores for various borrowers as required by various financial institutions. This analysis of the borrower’s creditworthiness simplifies the lender’s decision on whether or not to sanction the loan.

3. Smaller loans are now available: Taking out a personal loan used to feel like a burden, but that has all changed since the advent of fintech. There are now exclusive instant loan apps that provide small cash loans of up to 1.5 lakhs or more within 24 hours. During the financial crisis, the availability of small cash loans on the same day aided many individuals and households.

Overall, despite the myths and benefits, FINTECH unsecured lenders do take a risk in order to provide an easy lending platform with a balanced business model. One that lives up to the borrower’s expectations and is practical in lending money only in times of emergency.