To “Bank” or not to “Bank”
on The Banks…
We certainly can’t deny the upside of financial institutions like banks. From the traditional practice of accepting deposits and giving loans to worthy customers, banks have come a long way. They have introduced many a products and services like credit/debit/smart cards, electronic banking, home loans, auto loans, factoring, bancassurace etc. to make their customers’ lives convenient.
However, a large segment of people still enjoy greater benefits, not with banks, but within their social groups by lending and borrowing between themselves. And did you know, that they have been doing it for over 7 centuries,since the time there weren’t any banks! The amount of money that gets pooled up in India exceed Rs. 4,00,000 crores today.
We got really curious to know why people still continue to pool in such large numbers even when we have a huge banking system. This is what we found!
- Zero Documentation: Absolutely No paperwork is required to get loans. Its purely based on peoples Trust amongst each other
- Disciplined Saving: Involvement in a group exhorts people to set and meet their savings goal.
- Trusted Financial Community: People form their financially trusted groups, which they can leverage upon in times of contingent needs.
- Dual Benefit: A powerful borrowing cum savings instrument
- Loans at a cheaper rate: The borrowing rate is determined by the participants and not any external agency. Usually the rate can be much lower than the banks
- Higher Yield: Higher returns on contributions as compared to Fixed Deposits or Recurring Deposits
We wondered, if its better to bank on the banks or find your space in a world, that’s weaved out of trust and brotherhood, not mortgages and heaps of paper.
So we decided to build a unique product that would enable people to form trusted communities on the mobile.
Want to see how? Click here