The world as we know today has become more connected and despite this, there is still a huge chunk of the population which is deprived of basic banking facilities. This trend has seen a spurt in a number of fintech companies – as they have stepped in with the promise to solve what can safely be said one of the major friction points of our times.
Even before the COVID-19 pandemic hit the world, the World Bank estimated that 42% of the global population did not have access to a formal financial system.
Lack of penetration of banks has seen low-income groups lose out on a lot of facilities. And hence, crypto lending platforms have come to their rescue. They no longer have to rely on extensive credit checks, as these platforms provide easier access to credit than any other solution.
“Look the way this function is quite lucid and simple. Lenders are encouraged to buy and lock their cryptocurrency into a platform and then this acts as liquidity providers to borrowers. The lenders, in exchange, then receive an interest payment and this is the game-changer and these are higher than those offered by traditional banks. This leads to more liquidity,” a leading official told me on the conditions of anonymity.
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“If we look at the trends during this Pandemic, we will notice a major growth in the FinTech companies and there is a definite reason behind the same. It has become key for many businesses during the pandemic, and hence, it has also become necessary to connect companies in dynamic financing networks. There is a change in the way businesses are being conducted and companies have started looking at alternate ways to get their financing. We should not be surprised if we see FinTech companies in this sector continuing to lead the way,” he goes on to explain.
What needs to be understood here that much of the growth of the fintech ecosystem can be pitted on the fact that the quality of customer care has improved a lot, a factor which was and still continues to be neglected by banks.
The writing, as they say, is clearly on the wall. As we are grappling to limp back to normalcy, FinTech firms have grabbed the bull by the horns and their simple approach has offered practical solutions to people and well, they have not only grown but will be the future. A new normal, if ever there was one!