Mumbai (Maharashtra) [India], August 31 (ANI): Leading rural fintech Spice Money said on Tuesday it has entered into a joint venture with Tarya group, Israel's leading fintech player with 70 per cent P2P market-share, to launch a lend-tech platform targeted towards rural India.
The synergy between Tarya Fintech and Spice Money will lead to the creation of an innovative, agile, assisted and technologically superior digital lending platform, the companies said in a joint statement on Tuesday.
The JV aims to fill the credit gap in India by offering underserved and underbanked rural India a convenient platform to access credit easily with minimal documentation.
"This platform will address challenges that have kept rural India financially excluded such as lack of data, limited access and unviable unit economics."
India's credit gap is estimated to be over 330 billion dollars. Small businesses and rural consumers find formal credit limited and inaccessible due to the cumbersome application process, lack of financial data, collaterals needed for credit assessment and inappropriate products.
This leads to them resorting to often-exploitative informal credit sources. Wide adoption of technologies like artificial intelligence (AI) and machine learning (ML) has turned data into a great enabler for financial inclusion.
The companies said credit model in rural India needs to reimagine the products and processes by leveraging AI and ML to enable collection of alternative data in absence of traditional financial data. This can help to determine a rural business' credit-worthiness and capabilities.
The new JV will step in with a community lending model enabling rural borrowers to access credit on a digitised assisted platform quickly and seamlessly.
The digital lending market in India is expected to grow from 110 billion dollars in 2019 to 350 billion dollars in 2023 on the back of MSMEs' credit demand of estimated 490 billion dollars along with the increased internet penetration.
Dilip Modi, Founder of Spice Money, said the platform serves two crore monthly transacting customers on an average through seven lakh Adhikari (entrepreneur) network across semi urban and rural India.
"We have partnered with Tarya to bring in financial inclusion by empowering rural borrowers with access to easy credit. This will further financial freedom in Bharat and lead to overall national development," he said.
Eyal Elhayany, Founder and CEO of Tarya, said India has a huge potential for lending technology, especially in rural areas.
"Leveraging Spice Money's rural fintech expertise and experience, we aim to tap into the unaddressed rural credit gap and make it easy for rural India to get loans for their growth and development," he said. (ANI)