An Insight into the White Goods Financing – NBFC Registration and Licensing Requirement
If you are looking to set up your White Goods Financing NBFC in India and are not sure about how to proceed with the process of NBFC registration or getting the White Goods financing NBFC license, then this piece has all the important info you need. This blog will give you the answer to questions like,
How does White Goods Financing lending work in India?
How to start the White Good Financing registration process and get the peer to peer lending license?
What are the advantages of White Goods Financing NBFCs in Indian financial market?
Once you know the answers to the above questions, you will be clear about establishing your own white goods financing NBFC through NBFC registration in India. It will be helpful in taking advantage of the huge financial market and its limitless opportunities. We will also tell you the advantages of investing in white goods NBFCs and how we help new companies to register with Reserve Bank of India as a new NBFC. Now let us start with the benefits of white goods lending NBFC.
Advantages of White Goods Financing
More Lending Options for Small White Goods Business Owners
The requirement of small businesses differs from that of large corporates. Hence, the loan requirements for different activities also differ for small enterprises. Mostly these enterprises need small loans to meet a temporary shortfall of cash. These could include paying salaries to the employees, executing a large order suddenly, or in research and development. The NBFCs with their assortment of plans can meet the requirement of these small vendors, merchants, and distributors.
Increased Alternative Credit Supply for New Start-Ups
These big banks have inflexible policies that act as a roadblock to access the large part of the Indian population coming from a humble background. The alternative credit supply chain created by the NBFC has led to financial inclusion of the lower class of society. These lenders have also reduced the loads from banks to cater to every section of society.
Financial Inclusion of Potentially Risky Borrowers
Banks had a restraining policy towards small businesses as they were termed as potentially the riskier clients. The small business could not come back from any sudden downfall in business and so, were not eligible for loans from most of the banks. The NBFCs have flexible norms to lend loans to small business and offer cheaper interest rates that make paying off the loans easy for these businesses. This could lead to the financial inclusion of the small business who were traditionally kept out of the purview of the organized credit system.
A well-known fact is that empowering women entrepreneurs not only improves the economical prosperity of their family but also adds to the development indicators of the society where the business is established. The NBFCs could provide loans to these start-ups led by a group of women working to make it large through their small businesses. Small loans to such groups have traditionally been denied by banks due to the high risk of default. With the advent of NBFCs, the risks are lower due to low-interest rates and so the net profit margins for these small businesses could also increase.
Credit to Businesses in Small Town and Rural Population
Various reports across the country have indicated that despite having branches of regional rural banks spread across the country and other banks trying to reach the far hinterlands of India, the financial inclusion among small towns and rural areas remains low. The credit deficit in such areas could be easily managed by NBFCs as they can be operated online. The cost required for NBFCs to operate in such areas is also very low and therefore, they can easily have a physical presence in such areas compared to a large bank.
As John C Bogle Once Said,
“To earn the highest of returns that are realistically possible, you should invest with simplicity.”