How Does High Success Rate of eNACH Mandates Help NBFCs & Customers?

Success Rate of eNACH Mandates/UPI Autopay

Loans, in their different forms, have become an integral part of our lives. Whether it is for buying a new vehicle, new home, or for other financial needs, there is a type of loan available in the market. Unlike the recent past when borrowing loans was not that easy to come by in India, the current loan industry has an unprecedented picture.

As of Mar 2021, the size of the lending market in India stands at INR 156.9 lakh crores – a number that represents a 100% growth from FY2017 (as per CRIF High Mark Report). In terms of volume, the overall personal loan portfolio has also witnessed 3.8X growth during this period. Both banks and NBFCs have come forward to meet the rising demand for loans in the country.

However, on the darker side, there has been a proportionate increase in the number of loan repayment defaults. The early delinquencies in microloans have risen sharply due to the impact of Covid-19 pandemic, which has created problems for the lenders. On the other hand, customers face long-standing repercussions on their credit rating.

This is one of the reasons why NBFCs now focus more on setting up eNACH mandates for collecting loan EMIs from the borrowers. Being a pioneer in the digital payment sector in India, Paytm aims to create solutions that are engineered to help NBFCs streamline loan repayment collections while also benefiting customers on the other side.

Advantages of Paytm eNACH Mandate for NBFCs

  • Takes less time

Individuals who borrow loans from NBFCs have the option to accept the NACH mandate with the banks in which they have their bank accounts. However, these mandate requests can take up to three weeks for setup and approval. This can cause a delay in loan disbursement, which can ultimately lead to customer dissatisfaction.

Paytm eNACH mandates, on the other hand, are extremely fast. NBFCs can be set up almost instantly, without causing any delay or a lag in delivering a smooth customer experience.

Also Read: NACH Mandate: Meaning, Types, Benefits, and More

  • Has a high success rate

The success of loan disbursement is actually counted when the borrower receives the loan amount in his/her bank account. But technical glitches during digital payment processing can cause a fall in this success rate.

As a solution, NBFCs can use Paytm eNACH mandate to benefit from its industry-high success rate. This will ultimately lead to better business performance and a simplified customer experience.

  • Has a high successful debit rate

Next to setting up the eNACH mandate, ensuring successful debits from the linked bank accounts of borrowers is also important.

Paytm can help NBFCs benefit from a high successful debit rate to simplify their loan repayment collection process. It also means no repayments would stop due to technical issues or system failures.

  • Backed by more than 300 million users

Another reason that attracts NBFCs towards Paytm payment solutions is its current user base, which stands at 350 million. With Paytm eNACH mandates, NBFCs can target this user base to set up the mandate in the quickest manner, which will also give them an edge in loan repayment collection.

  • Sends notifications and reminders

Reminding customers to maintain the required balance before the eNACH mandate debit date is crucial for NBFCs. You can ensure that using Paytm payment solutions which send notifications to customers. It also brings the loan to the top of customers’ minds. The regular reminders till the day before the debit date also ensure successful debits.

The bottom line

Managing loan repayments is important for both NBFCs and customers. With Paytm payment solutions, these lending partners can go a long way in offering better services to their customers while also reducing defaults.

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