VN Finance Announces Small Ticket Loans – ‘Shramik Loan’ and ‘Rozgar Loan’ for Migrant Workers and Financially Excluded

Small Loans 

* 24X7 service; Within 1-day loan disbursal; minimal no of documents

* Funds even for those who cannot provide security or existing assets

In sync with the Prime Minister and RBI Governor’s clarion call to provide credit/ loans to the financially excluded and the unbanked, VN Finance, a tech-enabled NBFC, has announced small ticket loan offerings – ‘Shramik Loan’ and ‘Rozgar Loan’ for migrant workers and financially excluded small business men and women on the eve of Independence Day 2020. In the aftermath of Covid-19 and the problems faced by lakhs of people, VN Finance's approach is to deploy 24X7 service and disburse loans within a day with the least number of documents and hassle-free interaction using technology.

The ticket size of the loan starts from Rs. 25,000 onwards. Those people, who need unsecured loans and have no security or no existing assets, can directly (or through intermediaries) approach VN Finance and share their creditworthiness and repayment capacity. They will get the funds at the best of terms to achieve their dreams.

VN Finance also offers Secured Loans such as Loan Against Property, Loans against Gold Jewellery and Loans against Inventories. Every business needs ongoing working capital and this requirement keeps increasing with the growth of business. VN Finance's professional team fully understands business needs and provides funding against the goods and inventories already lying in the shops/godown. The small business owner just needs to furnish the inventory list, its value and their needs.

Mohit Kakkad, Director & Founder, VN Finance, said, “We stand committed to our vision of changing the society by helping people to follow the dreams by easy and quick financing. We are focusing on the segments who cannot afford to wait and cannot meet or understand the complex and time-consuming processes of conventional lenders. We work tirelessly to develop delivery mechanisms with technology to make our disbursal process easy, efficient and widespread. We plan to expand aggressively in Mumbai MMR region, Maharashtra State and gradually across India.”

VN Finance is also developing a network of banking intermediaries, Self-Help Groups (SHGs), NGOs and correspondents who can help facilitate credit to migrant workers, unbanked and financially deprived business men and women. Since the target segment is not necessarily highly literate and educated in technology, VN Finance is using technology to help them and the financial intermediaries in the easiest of ways.

Mohit Kakkad firmly believes that if India has to achieve financial inclusion in the true sense, NBFCs such as VN Finance have to play a significant role in enhancing financial literacy, seeking minimal collateral, shorter processing time and building distribution network while grappling with lack of credit history, absence of formal identity, cyclical income and paper work.

The Union Government and regulators have taken various initiatives such as Basic savings bank deposit account (BSBDA), Lead banking scheme (LBS), Pradhan Mantri Jan Dhan Yojana (PMJDY) and set up payments’ infrastructure like BHIM, UPI, DBT to jumpstart the process of financial inclusion. The Reserve Bank of India (RBI) in its National Strategy for Financial Inclusion 2019-24, announced that public credit registry has to be made fully operational by March 2022 so that authorised financial entities can leverage the same for assessing credit proposals. NBFCs can also access and analyze data from Google Pay, Walmart-owned PhonePe and Whatsapp Pay (to launch soon).

About VN Finance

VN Finance Pvt. Ltd. (VNF) is an innovative financial company Incorporated in March 2019 as a Non-Deposit taking NBFC (ND). The company is founded by 31-year old Mohit Kakkad with a vision to use technology to provide finance to hitherto unbanked section of society. The company is mainly engaged is providing the small and medium size ticket loans on secured and unsecured basis. Unsecured loans are being provided based on creditworthiness and repayment capacity of the borrowers. The senior management of the company consists of senior leaders from banking industry and mentored by some of the highly qualified professionals. VN Finance has put in place an interest rate policy, adopted by the Board, taking into account relevant factors such as, cost of funds, margin and risk premium, etc and determine the rate of interest to be charged for loans. It has a robust KYV Policy, Fair Practices Code and Corporate Governance Policy.

IDBI Bank Launches “IDBI Swarna Kalash” - Specialized Gold Loan Branches

IDBI Bank announced the launch of four specialized gold loan branches branded as “IDBI Swarna Kalash”, by remodeling its existing branches. These branches are located at Neelamangalam, Sivaganga, Vijaya Nagar, Bengaluru and L .B. Nagar, Hyderabad.

IDBI Bank in their Q1 FY21 Financial Results reported an increase in the growth trajectory with Gold Loans as one of the premium product with minimum delinquencies.

These specialized Gold Loan Branches will facilitate quick, transparent and hassle free Gold Loan financing. The Gold Loans are offered at a competitive interest rate, starting from 8% p.a., to cater to the increasing credit demand in the Agri, PSL, and rural markets. Overdraft facility is also available under these loans and can be applied via a digital platform.

Shri. Rakesh Sharma, MD & CEO, through a virtual mode, inaugurated these four branches in the presence of Deputy Managing Directors Shri Samuel Joseph and Shri Suresh Khatanhar, and Executive Director Shri Rajeev Kumar.

Speaking at the launch program, Shri Rakesh Sharma MD & CEO said that “We have witnessed a surge in the demand gold loan and have conceptualized “Swarna Kalash” as a premium offering of IDBI Bank. Our focus is on creation of such specialized branches to cater to the demand in the market and facilitate an easy access to our gold loan customers.”

Home Credit India Offers Easy Smartphone Loan Options in Unlock 3.0

Smartphone Loans

* Own a smartphone sitting at home with customer-friendly schemes from Home Credit

* Customers can now process loans from their homes with the help of Home Credit’s robust online program

As the nation sees ease in lockdown, businesses have also started to open. Having been closed for business for over two months, retailers are still unsure about customer walk-ins and how to service their demand. Home Credit India, a local arm of the international consumer finance provider with operations spanning over Europe and Asia, is focused to strengthen its partnership with offline retailers. The company has been functioning business actively in Bangalore with 940 key retailers. Big retail chains like Sangeetha Mobiles, Pai International, Devi International and standalone retailers like Colors Mobiles, Hanuman Telecom, Uday Electronics etc. are now open with all the necessary precautions and adhering to govt guidelines.

The retailers have witnessed 75% footfall in comparison to pre-Covid era. Most of the customers are venturing out for key purchases only and are following social distancing guidelines

In the given times, Home Credit has also built a robust online program for customers who choose to not venture out fearing COVID-19. Customers can now own a smartphone and get their KYC/loan approval procedure executed from the ease of their home without being physically present at the retail shop. Post the formalities, the mobile phone is delivered to their doorstep. Online outreach is further supporting the retailers in their sales during these challenging times. 

On the occasion, Mr. Ankush Khosla, Chief Sales Officer, Home Credit India said; “These unprecedented times have brought in significant behavior change among customers. With the country easing lockdown with restrictions, it is time that the Corporates come forward and take innovative steps towards supporting economic revival in the country. Home Credit is extending full support to its retail partners across the country with the hope to support our customers in every possible way, to make their loan taking journey less stressful even during these anxious times.”  

Home Credit India has resumed its operations country wide based on Government directives. The company has its operations spread over 350 cities across 22 States in India with a strong network of around 31,500 points-of-sale (PoS) and a customer base of around 11.3 million customers. 

India gets more room to grow with Stimulus-II package

The government on Friday announced the second and final installment of its fiscal stimulus package. Complementing monetary easing by the Reserve Bank of India (RBI), the Centre enhanced the spending power of states with specific measures to boost credit availability.

It offered additional sops to exporters and the small-scale sector, besides raising the level of protection for cement and steel sectors a tad. It has also incentivised purchase of commercial vehicles.

Credit availability has been hiked in a variety of ways, the interest ceiling on external commercial borrowings has been removed; the cap on foreign institutional investments in the domestic corporate debt market has been jacked up two-and-a-half times from $6 billion to $15 billion; a special purpose vehicle is being created to lend to non-banking finance
companies to the tune of Rs 25,000 crore; Indian Infrastructure Finance Company is being permitted to raise another Rs 30,000 crore by means of tax-free bonds, and states are allowed to borrow an additional Rs 30,000 crore from the market.

In addition, public sector banks would be given additional capital to the extent of Rs 20,000 crore over the next two years, so they can lend roughly 10 times as much additionally.

The latest measures, which come in less than a month after the first package was unveiled on December 7, are aimed at benefiting housing, NBFCs that lend to infrastructure and finance commercial vehicles.

Announcing the measures, Planning Commission deputy chairman Montek Singh Ahluwalia said: “By no measure can we insulate our economy from slower growth, when the external factors are of such enormous magnitude. However, we will be able to manage a 7% growth this fiscal through these measures.”

Mr Singh added that these contra-cyclical steps and fiscal policy “in these truly exceptional circumstances” would ensure that growth momentum would be maintained next fiscal, which, he said, would be tougher than this year. But such counter-cyclical fiscal activism has to pay a price in the form of a higher fiscal deficit.

“Considering the implementation of the Sixth Pay Commission, the consensus within the government was a fiscal deficit of 3%. The mid-term review of the economy said that the fiscal deficit would be over 5%, excluding the below-the-line items such as fertiliser and oil subsidy. If we include these items, the fiscal deficit could exceed by 3% of gross domestic product, what was being targeted,” said Mr Singh.

The budgeted target for the fiscal deficit is 2.5% of GDP. The global financial meltdown has already forced the US and some other major developed countries into recession, and hit India too. This year, the economic growth is expected to be around 7%, down from the 9% average of the past three years.

The first stimulus package, estimated at over Rs 30,000 crore, included a 4% across-the-board cut in excise duty for the remaining part of the financial year and an additional Plan spending of Rs 20,000 crore.

“Because of slowing industrial output and resultant tax receipts, the government will have to forego about Rs 40,000 crore this fiscal. This is a rough estimate in a dynamic situation and improved production because of the steps taken could offset part of it,” said finance secretary Arun Ramanathan.

To facilitate access to funds for the housing sector, companies developing integrated townships have been allowed to borrow overseas with prior approval of RBI. The ceiling on interest rates for all overseas borrowings has been removed to provide flexibility to companies to borrow abroad.

Source: Agencies