The government will soon launch a digital lending platform called Kashi (Cash over Internet) to approve loans to low-income households and small businesses, the Economic Times reported. Prime Minister Modi is personally checking progress on the program, which will use infrastructure already in place for Direct Benefit Transfer to transfer funds to debtors. “Cash over Internet brings seamless, paperless lending to farmers and labourers in just 5 mins [sic]. It eliminates intermediaries and enables low cost, zero-touch lending and ensures zero fraud risk,” the government’s think tank NITI Aayog, which has been commissioned to work on the project, tweeted. ET reported that Kashi will assess applicants’ creditworthiness based on demographic information and loan history.
Since the project has not gone live yet, the operational details of how this will play out are not yet clear; but ET quoted anonymous sources as saying that Kashi borrowers will have future DBT subsidies slashed to repay their loans. Kashi’s announcement comes as India faces the prospect of a slowdown in economic growth not seen in decades in the aftermath of the COVID-19 pandemic.
Products such as Kashi & KYC Setu must act as enablers for the street vendors of India. If we are able to free them from the debt trap created through informal lending, imagine the number of people whom we can bring out of poverty: PM @narendramodi pic.twitter.com/qCvOu9tiAF
— NITI Aayog (@NITIAayog) August 11, 2020
A collective of fintech industry executives are part of the effort, including PhonePe’s CEO Sameer Nigam, who appeared in a meeting with Modi on August 11 as a part of KYC Setu, a project that will be used to verify loan applicants for Kashi online. KYC Setu’s solution will also be reusable, NITI Aayog said, meaning that the same approvals can be used for other aspects of the business like insurance applications. ET reported that in the meetings held on August 11, representatives from private companies such as Pine Labs, INDmoney and Kissht were present, along with representation from the industry association iSPIRT and the Bill & Melinda Gates Foundation.
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