Digital KCC slashing costs for farmers, lenders
The frictionless credit initiative being piloted by the Reserve Bank of India (RBI) is helping lenders slash their customer acquisition cost by a whopping 70 per cent, while for borrowers the saving is six per cent of the loan amount, a senior central bank official said. The pilot started with an all-digital KCC (kisan credit card) lending, developed by the RBI Innovation Hub on the public tech platform, in Tamil Nadu and Madhya Pradesh this April.
image for illustrative purpose
Mumbai: The frictionless credit initiative being piloted by the Reserve Bank of India (RBI) is helping lenders slash their customer acquisition cost by a whopping 70 per cent, while for borrowers the saving is six per cent of the loan amount, a senior central bank official said. The pilot started with an all-digital KCC (kisan credit card) lending, developed by the RBI Innovation Hub on the public tech platform, in Tamil Nadu and Madhya Pradesh this April.
The pilot has been extended to four more states -- Maharashtra, Uttar Pradesh, Karnataka, Gujarat (for dairy farmers) from August 17 this year. The pilot launch of the public tech platform for frictionless credit to farmers has helped reduce operational costs for lenders by more than 70 per cent, while for the farmer, the saving is six per cent of the loan amount, Ajay Kumar Choudhary, an executive director and head of the fintech department at the RBI, said here over the weekend, while addressing the three-day global fintech festival.
