There are plenty of individuals in country whose credit needs are denied by banks without any reason given for decline of their application. It has been observed that banks decline applications of creditworthy clients with stable job, salary, credit history etc are also denied loans by banks.
Banks maintain a list of negative areas in their database, in which they refuse to provide credit to the customers. These areas usually are the slum localities of the city. Moreover, banks and NBFCs also maintain a negative list of occupations and generally do not grant a credit to employees working in lesser known companies. These individuals are then forced to apply to open market lenders where they are exploited by these folks by charging exorbitant ROI by these lenders.
But, these individual’s credit needs should be fulfilled by someone. These unfulfilled needs have given a new market opportunity to a new class of players to cater to need of every class of borrowers. Peer to peer lending companies in India are new kind of lenders which are disrupting the lending industry like never before. Peer to peer lending companies in India is based on the concept of social lending in which group of lenders fund a common borrower. These platforms utilize new lending technologies like payment modeling, data analytics, social modeling etc to assess the creditworthiness of the borrower. Banks coordinate with Credit information bureaus like CIBIL to maintain a record of all the borrowers on its system. Through these databases, banks also maintain a negative list of borrowers whose repayment track record is not that good, bounces in EMI payment or complete default. Whereas, Peer to peer lending companies in India don’t rely on a credit report only. For these platforms, borrower is just isn’t another number but is more than that. These platforms look into lot of other factors which banks usually ignore like future potential, personal interaction etc to assess the repayment potential of the borrower.
With all these new innovations in peer to peer lending in India, there is no point in these Peer to peer lending companies in India to maintain a negative list of borrowers or borrower’s locality. If you are a borrower whose application has been either rejected by banks due to a negative list maintained by them, you should definitely approach Peer to peer lending companies in India for your loan application.