PAISALO App - The Smart Way To Take a Loan

Paisalo App ends the struggle of the consumers standing in a queue in banks to get approval for their loans. With the use of Paisalo app, your loan is just a few clicks away.

In a conversation with PCQuest, Shantanu Agarwal, Chief Innovation Officer at PAISALO Digital Limited discussed the technology and future of the Paisalo app.

How does PAISALO makes taking loans easy?

The Finance needs of 125 crore people (Non-Income Tax Payers) is covered by only 6% Regulated Entities. Customers repeated visits to the banks, first for borrowing and then for re-payment along with slow and lengthy loan sanction process adds to borrowing cost.

PAISALO App uses the Trio of Measures i.e. Jan Dhaan, Aadhaar Card and Mobile (JAM Yojna) introduced by Honourable PM Narender Modi. Together with Artificial Intelligence, Machine Learning and current data analysis provide - Smart, Easy and Legally Eligible Loans to the customers. The loan that is Available, Aware and Affordable and directed directly into the customers Bank Account, along with Electronic Clearing House facility for ensuring repayment.
How do you ensure the safety and security of the details provided by applicants?

The Aadhar Number provided by the Loan Applicant on the Aadhar Vaults' web page over the Secure Link (SSL link) in order to perform his/her eKYC. Therefore the Aadhar Number is never captured on the App or Application for the purpose of storage. The eKYC data returned from UIDAI is kept encrypted on the Aadhar Vault remains encrypted forever.

A unique reference number is generated for each and every Aadhar Number on the Aadhar Vault and sent to the requesting application. The demographic data except Aadhar Number can be fetched from the Aadhar Vault by specifying unique reference number earlier sent by the Aadhar vault. Aadhar number is never kept in the database. The demographic data received from Aadhar Vault is kept in the Database with the Loan Application and only accessible by the Loan Origination Software which is again protected by username and password and accessible only over HTTPS (SSL Link).

What is the technology aspect of PAISALO app?

PAISALO App introduced Automated Digital Lending Platform entailing paperless financing on the basis of Aadhar Card and Bank Account details of the borrower. People no longer have to visit the bank for small loans, rather the finance is available right on their handheld devices.

The entire documentation process is app based. The process of giving a loan to MSME is done through the app, real-time, in front of the user, everything is open and disclosed. The customer knows about the loan and saves not only huge cost but also hassles to run around to borrow money.

KYC (Know Your Customer) process gets authenticated through GoI (Government of India). Aadhar database and documents digitally get signed. All disbursements of a loan are routed through the Bank Account of the borrower and instalments collection is done through eNACH (National Automated Clearing House) mechanism. Timely availability of loan would result in Adding Value Creation, and ensuring customers are No longer borrowing from unregulated players.

What more can we expect in the future?

The market size of these small loans in the country is estimated to be US$46billion, just on a conservative credit demand of US$400 per person per annum by just 10% of non-income tax paying citizens of India.

PAISALO is poised to increase its Loan Book significantly. The mobile app has disruption capability in the SME and Self Employment Loan Market of India.

And let’s not forget digital penetration of 400 million or more. That’s just a little over one-quarter of our population. And half of them transact online - the potential is huge. In three years, this number will be close to 650 million. They use the internet for two things - entertainment and financial services. Most Indians access the internet on mobile. Indians have bought and used US$16billion worth of goods and services online in 2016, and Statistics projects this number to triple to US$45 billion by 2021.

Further, the company is also working on adding support of various other types of loans in the App as well as looking at the advantages of BlockChain for the company, but we are in a preliminary stage right now.