How Gold Tech Startups Are Making Gold Lending Accessible and Hassle-Free
With social distancing and safety protocols in place, securing gold could have been difficult had gold tech startups not stepped in.
With the emergence of new era fintech platforms offering instant and easy loan disbursement, getting a loan has never been easier. From offering e-KYC at the customer’s doorstep to instant loan disbursement, borrowers can avail loans against their gold from the comfort of their own home. Typically, the same process would require the borrower to visit pawnbrokers, while carrying the collateral to hand over with them. However, not anymore.
Over the past year, lenders have witnessed a significant increase in demand for loans against gold as borrowers face an immediate and temporary cash crunch. In most immediate financial crisis scenarios, the first step is to liquidate or take out a loan against their valuable assets to keep the cash flow moving.
In the wake of the global pandemic, not only individuals but several businesses have also been affected. With social distancing and safety protocols in place, securing gold could have been difficult had gold tech startups not stepped in. Let’s dive into some ideas for understanding digitally secured gold loans:
Digitization of transactions
One of the most significant benefits of using online gold loans is the unparalleled convenience that comes with it. People who previously had to visit jewelers or bank branches while carrying their precious ornaments with them can now use their smartphone and ask a customer relationship manager to visit their premises and explain the various loan programs. ‘gold.
With digital agencyless models from new era fintech players, clients can apply for loans online or through apps. A loan servicer visits borrowers’ homes, performs due diligence on the borrower and their ornaments, and transfers the loan amount to the borrower’s account, all within 30 minutes to an hour.
The relationship manager who visits the borrower must ensure that the entire transaction is carried out through secure and reliable digital means. Verification of the manager’s identity, E-KYC, electronic signature of the loan agreement and digital disbursement of the loan are carried out through a verified and secure network. Customer data is usually stored in a secure database to ensure data security.
Moreover, the most critical part of the transaction is ensuring the safety of the client’s assets. Gold ornaments are packaged in sealed packets that cannot be tampered with by the loan manager. Packets are also serial numbered and recorded in the transaction. They can only be opened by banking partners for a second audit and when customers release the gold.
Therefore, gold tech players ensure that these assets are managed securely through technology-driven checks and assessments to maintain client confidence.
Easy payments and recharges
Apart from the loan disbursement process, customers also have the option to transact online while repaying the loan or paying the interest rates. Reliable and digital processes are behind the popularity of these tech-based gold loan service providers.
Also, taking a top-up on a loan usually requires some documentation process where borrowers have to go to the bank to complete the deal. Gold-tech startups simplify the process through technology-driven means, where the borrower does not have to travel, and the whole process can be done from home.
Low interest rates and customer first approach
Most fintech players in the gold lending space offer low interest rates due to lower operational costs involved in running digital branchless models. Additionally, Gold-Tech lenders in the industry offer flexible and customizable prepayment and repayment programs. This allows the borrower to be advantaged by fintech players and new era NBFCs over traditional lenders.
Most importantly, these lenders enable financial inclusion for small ticket borrowers who are often forced to stand in long lines and move from office to office by making loans accessible and hassle-free. The process to avail the loan digitally is fast, easy and convenient for the customer.
The use of technology has resulted in faster loan processing, accurate gold valuation, custody and cost reduction. Strong customer service is also a way for these companies to ensure smooth delivery of gold loans.
Customers who encounter problems can contact customer service who will resolve their problem within the time limit. Fintech startups therefore play a pivotal role in paving the way for a more inclusive and customer-friendly industry.
by Ankur Gupta, Founder and CEO, Ruptok Fintech
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