All over the world, there is a growing affinity towards technology and its implementation in the money lending market and finance. There are lots of tools and software available both in free and paid versions that are used by all private and online money lenders, large financial organization commonly known as NBFCs or Non-Banking Financial Corporations and all private and public banks.
The use of technology in finance and money lending is not only found in the developed countries but is also seen all over the world, even in underdeveloped countries like India and LDCs or Least Developed Countries such as Myanmar and other 48 such countries as listed by s the UN in 2018.
It is a universally accepted fact that to take advantage of the country’s natural resources to bring about economic progress and growth in its agricultural sector, easy access to financial services plays a crucial role. Hence, the use of technology in financial services is paramount because it needs to be bettered so that countries can make the best use of its rich natural resources.
Better financial service and architecture contributes to the growth in agricultural production. Inclusion of technology in financial service is a factor of growing importance because countries need to raise the level of their rural economy for proper and balanced development of the country.
Regulate the money lenders
However, the rural populace barely has any notable access to any form of financial products or services. There are several reasons for this and it has significant effects on the rural sectors.
The fact that most rural areas do not have easy access to financial services and the product is primarily because there is no technological advancement and use in these areas, especially in the financial service sector.
Money lenders in rural areas play a significant role in the lives of the people living in these areas. They are also the ones that take advantage of this fact the most and try to gain maximum profit from lending money, mostly by resorting to means that are not acceptable or favourable.
For a long time, they have been the most popular and perhaps the only source for the lower income residents to borrow money. This popular sources of credit included pawn shops as well. However, money lenders or pawn shops, both are usually unregulated and therefore there is a high chance of malpractice in the lending process in the rural sectors.
Now with the advent and use of smartphones, there seems to be a silver lining in the cloud as far as money lending industry is concerned in the rural sectors.
Over the years the use of smartphones has risen significantly making it a booming industry. According to studies it is seen that:
The number of mobile users was a meagre 10% in 2014
The same skyrocketed to more than 90% in 2018.
However, this indicates a few things and the most notable one is the bettered internet service and easy
access to it. The positive effects of it are also worth noting.
This has enabled online services and businesses to come up and make an impression in the market and the number of online businesses in types and also in volume has shot up in the past few years.
Now people have a lot of stores to choose from when they buy groceries or clothes, plane tickets or to make any type of purchases. People now do not have to go to physical stores anymore and spend and waste time, energy and money.
The e-stores have enabled them to shop for anything from the convenience of their homes and a large number of stores has made it more convenient for them. For example, just type online money lenders and you will see that not only https://libertylending.com but a host of other names will pop up. It is up to
you to choose the right one according to your need and suitability.
Now you can even pay money to others using your mobile phone, thanks to the advent and use of technology.
However, while people have taken on to the trend of using mobile phones, the economy on the other hand still continues exclusively to function almost always in cash. The primary reason for this is the lack of trust in the finance and banking system apart from the inaccessibility of these services and products factor.
Overcome the challenges of financial institutions
Banking and financial system have to face and overcome a host of challenges down the road. All these challenges slow down the pace of their operation and also make the loan products inaccessible for the people, especially when it comes to reaching the people living in the rural sectors. The set of challenges met by the financial institutions are now easily overcome by the use of technology.
With the digital financial services lending money is not only fast but is also safer now as it has eliminated cash from the lending operations.
The loan officers now do not need to spend long hours of the day every day to collect cash instalments from the borrowers.
With everything automated, there is no need to count the cash several times while collecting cash from an existing customer or preparing to disburse a loan to the new customers.
Therefore, it can be said that the advances in and the use of technology has changed the concept, perception and process of money lending. The use of financial products as well as the find tech companies is now cashing in on the smartphone boom of the country as well as on the faster and easier access to the internet.
In short, it has allowed the money lending market to provide user-friendly and low priced digital financial products to the citizens. Therefore, the use of technology in the finance sector is a welcome and appreciable approach as it has enabled the financial products to reach all throughout the country ensuring balanced development.