Evolving role of technology in gold loans has empowered rural Indians

Gold loans have been a popular source of credit in India for centuries. However, in recent years, the industry has seen a significant transformation, thanks to the evolving role of technology. One area where technology has made a significant impact is in rural India, where gold loans have empowered millions of people.

One of the most significant advancements in technology has been the rise of digital platforms for gold loan lending. Digital platforms have made the loan application and disbursal process faster and more efficient. Borrowers can now apply for a loan online, submit the necessary documents digitally, and receive funds directly in their bank accounts. Doorstep offerings have eliminated the need for borrowers to travel long distances to apply for loans, making the process more accessible and convenient.

The gold loan industry's future is closely tied to further digital integration of technology and new innovations. In India, the use of digital wallets and online payment options like UPI has seen significant growth. Products like gold-secured credit cards and gold wallets are expected to flourish in the future. Some players have previously introduced card facilities and are working towards refining them. Recently, fintech players, mobile e-wallet companies, and brokers have introduced gold wallet facilities for their customers, allowing them to purchase certified and pure 24-karat gold, make fast and easy money transfers, and acquire hassle-free micro-loan services quickly.

The digital space has transformed rapidly, and there will be many advanced customer-centric techniques in the coming years with appropriate controls over backend processes and operations. Cutting-edge banking and loan systems have enabled finance companies to reach deeper sections and areas where physical reach was previously limited.

Technology has also made gold loan lending more transparent and secure. Loan officers now use digital platforms to verify the authenticity of gold and evaluate its value, minimizing the chances of fraud. This has instilled confidence in borrowers, especially those in rural areas who were previously hesitant to take loans from traditional lenders.

Moreover, the use of technology has enabled gold loan lenders to expand their reach in rural India. With the help of digital platforms and mobile apps, lenders can now offer loans to borrowers in remote areas where traditional banks do not have a presence. This has provided access to credit for millions of people who were previously underserved.

Another significant development has been the adoption of artificial intelligence and machine learning in credit scoring. In the past, lenders relied on manual processes to evaluate a borrower's creditworthiness. However, with the help of data analytics, lenders can now assess credit risk more accurately and efficiently. This has enabled lenders to expand their customer base..

The digital journey has revolutionized the banking system, and new products and offerings will continue to simplify processes and provide a pleasant experience for end-users.

-- Partha Sengupta, CBO, Radian Finserv.