India's Largest Lending Platform | Fibe (formerly EarlySalary

Every 1st March, the world celebrates “the right of everyone to live a full and productive life”, in the form of Zero Discrimination Day. While we’ve made significant progress on this front with each passing year, perhaps we should pay attention to an aspect closer to our hearts as a brand – credit access. Financial discrimination is a reality, after all. Fortunately, with sensitivity at the forefront in this age, there is considerable awareness being spread to combat it. This is now leading to better opportunities in the financial sector, including loans.

The loan market in India is rising. Take the period February 2017 to exactly a year later, when there has been a sharp increase in the number and assets under personal loans, recording a growth of 20.4%. The number of personal loans and credit card debt recorded for around the same period was almost double the amount of FDI in the country. If we go even further back, for the period of 2014-2018, the compounded annual growth rate of the same has increased four times. 

But this doesn’t always convert to good overall growth. Despite the rise in the amount of credit doled out, there remains a disparity between the total number of applicants and those that are approved for loans. The rift goes deeper than portrayed. Borrowers are not rejected just out of necessity to protect the banking system, and not every rejected application is at a considerable risk of not repaying the loan. Sometimes there is the simple issue of discrimination at the root of this.

What Discrimination Do Borrowers Of India Face?

Studies show that there could be a number of modes of bias. It could be on the basis of prejudice, inaccurate stereotypes, and incentivization. For example:

• Banks have been known to have a low acceptance rate based on the location of the borrower.
• In other cases, banks may often reject cases based on the nature of the business a borrower may be running.
• In some rather unfortunate cases, human bias – such as an agent’s perception of a borrower – from mannerisms to even names, could be the cause of a loan application to be rejected.

Banks, at the end of the day, are capitalist organizations. This means that the decisions they take are based on the impact they’d have on the bank’s bottom line. If a bank has seen historical trends indicating higher loan defaults than average from a particular area or for loans to a certain business, higher rejection rates simply become a matter of policy over time. And when there’s human involvement involved, discriminating on a borrower’s characteristics may not be, strictly speaking, legal. But the human bias may manifest itself in other ways – leading to a more thorough underwriting procedure than normal, with a higher probability of locating red flags as compared to other borrowers – ultimately becoming grounds for rejection.

As a borrower, if you have any grievance related to discrimination, you will probably have to go the legal route. It is a lengthy and tiring process, and for many, this is not an option. They prefer to whine about it and get on with their lives.

Banks are heavily regulated by the RBI and government when it comes to lending. However, a bank, in theory, is a business and it is up to them to accept a loan application or not. While the regulations in place work to prevent misuse of power and ensure the sustainability of banks to some extent, whether they create a free and fair mechanism for the public to gain loans is a matter for discussion. To clarify, there are no fundamental flaws in the lending system in India, but there are issues. Personal bias or discrimination on the basis of status or profession plays a part in deciding whether your loan will be approved, is, unfortunately, a reality.

Take home loans, for example. If a lender is not convinced by you or does not like your predicament for any reason, you are likely to get rejected. The reason for this, again, is the regulations in place and the need to recover debts. This is dependent on the business model of a bank, which requires constant cash flows, mainly so that it can honor withdrawals. Not being able to do so reflects very badly on the bank. This is often a reason, and sometimes even an excuse, to reject applications. And nothing can be done about it because it is their legal right to do so.

Having said that, sanctioning loans is the primary source of income for banks. They would not intentionally try to get your loan rejected. But unexpected policy-related and unconscious discrimination can often play a part in this process. 

How Fintech Platforms Are Coming To The Rescue

To that end, fintech portals like EarlySalary are superior alternatives, as they don’t subject themselves to restrictions as stringent as those for the banks. They are conceived out of the shortfalls of the current lending system and work to fix holes in it (and of course, succeed as a business).

Talking about lending platforms, every lender might have a different working mechanism:

• They are free to create whichever lending structure they want however they see fit, provided the intention is not to defraud others. 
• This gives them a competitive advantage as they can use advanced techniques to create a more efficient system to compute a potential customer’s ability to repay before creating the mode of repayment. 

For some lenders, this is a rigid system with set steps. For others, it is flexible. What is understandable here is that they provide many advantages as compared to banks. 

• For one, there is a lack of complex paperwork and wastage of time. 
• Since most underwriting and approval processes are information and computer-based, there is little scope for bias. In fact, there is very little contact between you and the agent, as most of the requirements are taken care of when opening an account with the lender, which again is usually quite simple. 
• The focus of lenders is to make the process simple, and they handle everything else for you. 
• A few things don’t change – should you provide false data, your application will be rejected. The verification process is strict in nature because they don’t want to be scammed.

Things are not looking too bad in the fintech sector, with the inaugural Fintech Adoption Rate in India in 2017 found to be 52%, compared with the global average of 33%. It then grew to an amazing 87% in 2019. This is fairly healthy for an industry that has truly taken off in the last three years. The market size a year prior to that was estimated to be around $8 billion and a growth of 1.7x is predicted by 2020. This is not all – the Compounded Annual Growth Rate over five yours is estimated to be 22%. A major contribution to this is the rise of digital payments and mobile wallets in recent years. This is set to be a contributing factor in raising awareness over digital transactions which could possibly lead to further growth in the fintech sector.

With the demand of loans increasing due to awareness over the falling value of money, there is an ever-increasing need to ensure that the lending system is not biased.

A large number of players in the market are working towards this, having a goal of a discrimination-free lending system. With every small step, they reach closer.

When it comes to your finances, learning how to save money from income tax is a skill that one should develop. Tax planning is essential and fairly easy once you arm yourself with a few tried-and-tested tax-saving strategies. In fact, when done right, you can save a significant amount of your income. 

Here are a couple of tax-saving tips to help you streamline all your tax payments:

#1 Keep an eye on your savings account

This is one of the easiest ways to save income tax. While the interest generated on a savings bank account is recognised as income, you must know that the first deposit of up to ₹10,000 is exempt from any tax.

#2 Use tax-saving mutual funds

When learning how to save maximum income tax, be sure to consider your investing portfolio. Tax-saving schemes like the Public Provident Fund, National Savings Certificate, Equity-Linked Saving Schemes and others can be quite handy for such uses. 

Thanks to these schemes, you can reduce your taxable income by claiming deductions up to ₹1.50 lacs every year, as per Section 80C of the Income Tax Act. In a bid to learn how to save on tax, be sure to consider the other side of this coin. Investing your money for the sole purpose of reducing your tax outgo isn’t ideal. Your actions should contribute to your financial objectives, so invest wisely.

#3 Avail income tax deduction for rent

A salaried professional living in rented accommodation can enjoy the benefits of deduction claims like the HRA exemption. However, in case it is not applicable, you can claim deductions on the rent with the help of Section 80GG of the Income Tax Act. 

Such deductions are crucial income tax-saving tips when planning your finances. To save income tax, tips like these come in handy and you should learn about them. In addition to availing this deduction, you can speak with your employer and ensure that your salary structure is accurately aligned with your needs. In this instance, you must ensure that you get the HRA component of your income, as you would need this for tax-saving purposes. Similarly, if there are other viable components that could qualify for deductions, ensure that your employer includes them in your salary structure.

#4 Borrow loans smartly

When you take a loan for personal reasons from friends, relatives, or other informal sources, you have to pay taxes. This is because the principal amount in such cases is considered income, and you have to add it to your tax math at the end of the year. An alternative to this is to borrow loans from banks and NBFCs or even online from an instant loan app. 

While these personal loans aren’t great tax-saving instruments, you can avail benefits on the interest you pay. However, you can earn deductions on the interest you pay out in some specific cases only, such as:

• Taking a personal loan for business
• Funding your education using a personal loan 
• Availing a personal loan for constructing or buying a residential property

#5 Don’t wait for February

An important part of learning how to save on tax is to understand that it isn’t a last-minute effort. Be aware that tax planning and optimisation is a continual process. It requires a keen eye for detail throughout the year. Taking quick decisions on taxes as February concludes can result in errors and confusion, such as:

• Choosing the wrong tax-saving product in a hurry
• Being unprepared for a large money outflow for your investment option
• Being financially unprepared for a large tax outflow itself

As any wise investor agrees, you have to pick investment options according to priorities and risk tolerance apart from tax optimisation factors. This can reduce your last-minute stress and help you learn how to save on tax more efficiently for the next year. 

Moreover, by not delaying this process, you avoid penalties that are applicable for missing out on the deadline. This is a common issue and many miss out on the last date to file taxes. Waiting until the end of the financial year is never a smart option, especially if your goal is to reduce your tax outgo.

Ideally, this process should get initiated at the start of the year and action your tax-saving strategies right from the start. You can hire financial experts to assist with the planning process and ensure that you have the right instruments for maximum savings. In fact, availing the services of a professional may be the right way to go about it.

#6 Get insured and insure your loved ones

One of the efficient ways to save income tax and save money in general is to purchase health insurance. Having an active insurance policy has many benefits, and one among these is that you get deductions on your premium payments, as per the IT Act. 

If you are paying the premiums for health insurance plans for yourself and your dependents – your spouse, and your children, you can claim up ₹25,000 as a deduction. Additionally, premiums for health insurance for your senior-citizen parents qualify for a deduction of up to ₹50,000. 

While the tax POV is one way to maximise your savings, health insurance in general is also a smart option when prioritising savings. This is because it acts like a financial safety net when you need medical care or are faced with a medical emergency. With comprehensive insurance, you can get coverage going up to lacs of rupees, and this eliminates the need for you to depend on your savings.

The Verdict

Now that you know how to save on tax, it is important to remember that not all tax-saving options are the same. Pick strategies, opportunities, and even investment vehicles that best suit your needs. Security, cash flow, and returns are some factors to keep in perspective. After all, your objective shouldn’t be just about tax saving but to smartly leverage the opportunity to help you accomplish your financial goals.

As any 20 something having lived in the 2010s would concur, financial planning and money management is a critical skill to have in today’s day and age, perhaps more than in any period before. It’s a common belief that your late 20s are the most financially stressful years of your life. Which is partially true. There’s something that can be done by everyone to reduce financial stresses with good money management. 

Over the years, increased population, inflation, and economy, it has become increasingly difficult to achieve, let alone maintain, financial stability. This is especially true for people in their late 20s as they are at the beginning of their careers. Many also take education loans for advanced studies or starting their own businesses.  This is the first time people in their lives are earning a decent amount of money and are responsible for it, so it’s expected that they are naturally careless about it. 

Another reason that these years are especially difficult financially is the rate of inflation and rising prices rarely ever matches the rate at which people’s salaries or paychecks are increased. A major portion of the newly graduated work in large corporations based in expensive metropolitan areas, which tend to increase their living and operating expenses by significant amounts, then say living in small towns where expenses tend to be frugal. An important factor here is also peer pressure and the burdens of social media. In today’s digital world, people are in a constant race to indulge in consumerism, often for the sake of perceptions. This lifestyle is especially appealing to the youth, but it doesn’t mean it’s financially responsible. 

Credit cards also enable many to live beyond their means. They lead to unexpected debts though, and it’s important to remember that credit card debts are no joke. We’ve even done a dedicated post on their perils here. Interest rates on credit cards can be ridiculously high. 

Another critical issue that merits a mention is the rising prices in the housing sector. The rates of properties have been on a one-way trajectory in almost all urban and metropolitan areas – again, the areas where a majority of graduated youth work. Buying a house in cities has become practically impossible even for someone with a very well paying job. It’s something on every youth’s mind, as owning a house is a standard by which the success of a person is still judged in society. All of these factors combine to make the late 20s a really stressful period in anyone’s life in today’s economic world. 

However, with a little bit of help from a proficient financial planner or accountant, all of these things can be handled pretty easily. Here are some very important steps that people in their 20’s must follow to ensure financial freedom and independence for their future years to come. 

1. Start living within means: The hard, but most effective way to keep a check on expenses, and maintain savings in today’s economy. And this is just the first step. People should do their best not to spend more they make in a month, or it could trap them in an endless cycle of debt repayment. 
2. Stop using credit cards: This is one of the best actions you can take to stop wasteful spending – skip credit cards, or even cancel your existing ones. Almost all the stuff you purchase with a credit card, you could with the debit alternative. Or, if you’re short on cash, from instant loan apps that offer far lower interest rates. 
3. Formulate a financial plan: A clear financial plan with objectives, tabs on expenses, and more is crucial when you start out your career. Define realistic goals based on your spending and saving habits. A financial plan has to include everything from purchasing a house to securing your retirement to monthly expenses. This should ensure you remain financially secure over the long term. 
4. Generate passive income: Something everyone can do in their spare time to make a bit of money is pick up an interesting hobby that can create a passive income stream. Examples include blogging, photography, or even web development. It doesn’t necessarily have to be related to your job. In addition to being an efficient use of your free time, it also generates extra income that you could perhaps funnel into building a financial portfolio with varied investments.
5. Be Smart With Debt: Of course, living within your means may not always work. We may be on the receiving end of insufficient pay, high essential expense, or a combination of both. In such cases, it certainly makes sense to turn to some debt financing for assistance. At the same time, it’s important to be prudent about your choice of debt. Pick the right loans, with the right interest rates, and with the least hassle. Fibe, for example, offers instant Personal loan via your smartphone up to Rs 2 lakhs, at interest rates as low as Rs 9/day.

In conclusion, the 20s are financially stressful, turbulent times. It certainly can be a fairly stressful and confusing phase. At the same time, it’s also a time of immense learning and growth, and an opportunity to be financially proficient is not one to be missed. Good luck!

As an increasing number of organisations across the globe recognise the paramount significance of financial wellness programs for their employees’ financial health and well-being, a common awareness in the corporate sector is the concern about financial literacy among new and existing employees. 72% of the employees in Indian workplaces had no idea about how to manage their retirement savings, as per a survey by ArthaYatra. The same survey pointed out that a whopping 68% of the employees faced financial stress in their lives and 37% of the employees faced distraction at work due to the building stress. 

Firms and organizations have come to discern the futility of the traditional financial programs in the wake of current times.  New customized programs are required to handle employee stress by helping them manage their expenses, investments, insurance, loans, and guide them in planning their finances in the present and for their retirement in the future. The firms, therefore,  are entering into tie-ups with lending portals and financial wellness partners to help them manage their employees’ finances and promote better productivity at work. By 2018, over 77% of Indian companies were expected to onboard financial wellness partners, a survey reported.  

Fibe, among the top online lending portals in India, has partnered with more than 250 companies and assisted over 4 million employees in overcoming their financial worries. So far, it serves as a financial wellness partner to 350+ organizations. By focusing on a singular problem faced by its core target group – young salaried working professionals, Fibe enjoys a considerable edge over other lending portals. Let’s delve deeper into this interesting conglomeration with organizations powering financial Wellness for Corporate India. 

Managing The Monthly Cash Crunch

Young professionals who may be underserved, or have just begun earning usually find it difficult to manage their expenses. The month-end financial slack is a major cause of financial stress among such professionals.

The objective behind such corporate partnerships is simple – to revolutionize the short-term loan scenario by introducing the concept of an instant digital salary advance:

• A professional can get up to 4 times their monthly salary amount as a salary advance with no liability accruing on the employer.
• The interest rates start from INR 6 per day. 
• Short-term loans ranging from INR 8000 to 200000 can be availed to meet emergencies.

This helps in relieving the employer of the need to grant personal loans and the employee of any financial stress. The flexible repayment schedules act as a cherry on the cake letting the employees plan the repayment as per their convenience. 

Education and medical needs

Besides monthly expenses, employees may require funds to finance their higher education or to pay their children’s tuition fees. At other times, a medical emergency may force them to opt for credit. Such expenses, if not met at the right time, can have serious implications on the lives of these professionals. To cover such expenses, EarlySalary ensures:

• One-click emergency loans to cover hospital bills and to pay EMIs of a previous loan. 
• Tie-ups with a large network of schools and colleges for easier reimbursement of school, graduation or skill up-gradation courses’ fees. Zero down payment and zero interest on EMIs further relieve the burden of the employees. 

Travel and recreational needs

A Majority of employers rightfully consider recreational needs as an intrinsic part of employee health and well-being. EarlySalary assists here as well, taking care of the travel plans, shopping needs and recreational ventures professionals may have. It has partnered with major brands – like MakeMyTrip, Flipkart, Amazon, and others- helping employees derive direct benefits:

• Employees get the convenience to shop and travel at 0 % EMI with the click of a button. 
• The ES Salary card provides exclusive benefits by providing safe credit to the employees 24*7. The ES salary card provides a dynamic limit for all types of transactions. 

Future financial planning

As per a survey, 33% of employers have found an increasing number of employees coming to work but unable to engage with their work. Financial stress also leads to the issues of employee turnover and absenteeism on part of the employees. Firms spend considerable amounts in recruiting and training personnel and hence, naturally making fixing such issues their prerogative. Besides current financial planning, retirement and insurance plans should also figure on the list of priorities.

With partners such as Bajaj Allianz, Apollo Munich, Coverfox – EarlySalary takes care that the premium of the insurance plans is paid on time. It offers top-ups for existing insurances and parental coverage over insurance. 

Seminars and Education programs

The idea here isn’t to just assist professionals with quick cash but to ensure a high level of financial literacy for long term benefits. to boost financial courage. and their confidence. Via seminars and educational programs, employees can gain from practical advice related to credit management, budgeting, and the knowledge to go ahead with their day to day expenditure.

EarlySalary has been offering these customized solutions in association with Talent Edge. It is also engaged in conducting financial wellness seminars related to:

• Financial planning
• Credit counseling
• Debt management
• Budget guides

These programs intend no liability for the organization. There is no working capital or financial loss to the employers from running the program internally. A more productive and financially resilient workforce has organizational advantages that are fairly obvious, with the potential to go a long way in helping a firm achieve its objectives.

Fibe is assisting employers and employees bridge the gaps in their financial understanding via its succinct utilities and employee-centric programs. So far, over 1650 crore loan amount has been credited to the accounts of the blue and grey collared class of working professionals across India.

Many more to come!

Love is the most uncensored emotion that creeps unknowingly in each of our lives. Or, to put it better, it has been ubiquitously present as a part of our existence. Underlying in almost every benevolent act of ours, we celebrate it every day. But just as a sapien needs his birthday to claim another year to their existence,  we have Valentine’s Day celebrated each year as the day of love. St. Valentine would feel alien to the concept of an entire week of roses, hugs, kisses, teddy bears and chocolates but Valentine’s Day has actually become a fairly commercial, multi-million industry on the rise each year. 

In this second post of our 3-part Valentine’s series – #MattersOfHeartAndWallet, we explore how India shops, and splurges, on Valentine’s week. 

Love is not a commodity to be bought or sold, of course, but today love has equal sync with money and romance. India has seen a steep surge in Valentine’s Day rush in terms of gifts, dates, and trips whether for partner or others, whether as a couple or all alone. Let us mark in terms of numbers the trends in India of how love transpires and conspires to empty our kitties.

Indians Love Valentine Gifting 

We like to pamper each other when in love and what better day than Valentine’s’ Day to do that. The spending stats of Indians show some interesting and some queer facts about the expenditure on love:

A survey by CashKaro.com indicated that about three-quarters of couples bought gifts for their partners to celebrate the Day, while 80% thought this was essential practice for Valentine’s Day.
Younger couples lead the way here – those indulging their partners through gifts most commonly belonged to the age group of 16-24 years. India, with 70% of its population below the age of 35 years, is sure to witness a rapid increase in this gifting trend in the coming years. Interestingly, 77% of the men felt that they ought to pay on dates.

The Heart & Wallet Go Hand In Hand

Valentine’s Day records the third-highest number of orders (after Diwali and Raksha Bandhan) placed for gifts in India. Money and love have surely got a connection with each other when it comes to 14th February. Thousands of crores are spent on gifts and dates all across the lovestruck regions of India. Take a look at the facts:

• Even as early as 2014, we’d seen a whopping INR 16,000 crores being spent, which swelled to 22,000 crores next year. 
  
• A majority of the people spent anywhere between
  INR 1500 – 3000 on flowers, candies, and chocolates among other gifts. 
  
• Corporate employees and those aged 30+ years prefer more expensive gifts, with their spendings ranging anywhere between INR 1000 – 50,000. For the younger generation, the range comes down to INR 500 – 10,000. 
  
• Another interesting finding is – changing gender roles. Women between 25-35 years spend 35% more than their male counterparts.

V-Day Preferences

When it comes to making our loved ones happy, we don’t count the bills. The week starts with Rose Day, when gifting flowers especially roses and orchids are the trends, followed by other days such as Chocolate Day, Teddy Day and others before Valentine’s Day finally arrives. Besides gifts, people like to go for dates, on holidays and on short adventure trips as well. Check out the trends:

• Candlelight dinners seem to be losing their popularity. The top preferred gifts now are Jewellery, Bouquets, Chocolate hampers, and Teddy Bears.
• People don’t just gift their partners. About 43% of the gift orders placed were for loved ones other than the buyer’s partner. 
• We’re also opting for more thrilling options too – such as adventure sports like bungee jumping, surfing, among others, and holidays to offbeat destinations.
• Singles are trying to find love in pampering themselves. The number of trips by solo-travelers to foreign locations increases considerably around Valentine’s Day.

This V-Day why to worry about managing your finances

Indians are die-hard romantics and know how and when to please their loved ones. But sometimes these splurging can fall heavy on the pockets of the salaried class. Enjoy each moment of this Valentine’s Day and shower your partner with gifts and dates without the worry of managing your finances. With Fibe, you can get an instant loan from anywhere between INR 2,000 to INR 2,00,000 at rates of interest as low as Rs 9/day. The loan amount can be availed of even if the employee has no credit ratings. The loan amount can be paid in installments over a period of time adjustable as per your needs and convenience.

So don’t stop yourself from proposing your crush or rekindling your romance this Valentine’s.