The outbreak of the pandemic has exposed the growing disparity between the few who have access to affordable health care and the many who do not. Before the pandemic, countless Indians found themselves in the horns of a dilemma, forced to choose between health and wealth. With 63% of India’s total healthcare spending being paid out-of-pocket, millions of families are being pushed into financial ruin. Now suffering from the pandemic, millions, including those who are underserved and marginalized, are faced with this impossible choice.
Driven by the demands of the times, the healthcare sector must pave the way for equal and affordable access to quality healthcare. The advent of virtual consultation, remote monitoring, and telemedicine is reducing the disparity in health care but many issues still exist. The opportunity for digital health care lending has never been greater and more urgent. Expected to grow to $ 350 billion by 2023, digital lending will help eliminate the health poverty trap for millions of Indians.
What is digital lending?
Digital lending is a FinTech innovation where all processes covering borrowing and lending such as loan application, approval, disbursal, and repayment take place remotely on the web or mobile app. Under the conventional paradigm, individuals when faced with medical emergencies can borrow excessive loans from informal lenders or sell personal assets while awaiting reimbursement from insurers if available. . With digital lending, people can avail an instant medical emergency loan by uploading documents to a digital lending platform and being approved with minimum paperwork.
Digital lending apps use a combination of business models such as peer-to-peer lending and crowdfunding along with new-era technologies such as AI, automation, and data analytics. This allows them to reimburse health care costs and the cost of treatment to borrowers with low credit scores and low-moderate incomes.
Instead of being forced into a bad cycle of ill health and poverty, digital lending can expand the scope of finance and
integration of health care for many underserved and marginalized communities.
Growth of digital lending in India
Digital lending is estimated to grow sharply from $ 9 billion in 2012 to $ 350 billion in 2023. The global pandemic, more closely linked to this growth, has prompted tens of millions to turn to digital lenders when faced. in life -threatening emergencies and growing health care costs. At the height of the pandemic, countless individuals and families availed of online health care services and instant digital loans. According to the FinTech Association for Consumer Empowerment (FACE), digital lending volume doubled to Rs18,000 crores in FY 2021-22.
Accelerated by the proliferation of smartphones and adopted by government initiatives, digital lending has the potential to reduce financial bottlenecks in healthcare. The financial disparity that prevents marginalized communities from accessing quality health care services can be eliminated through digital lending. Digital lending can expand financial access which in turn will increase access to health care. In a country like India, where nearly 70% of the population has been sequestered from healthcare connections in rural areas, digital lending along with telemedicine could allow them to access de- quality health care.
Digital lending: way for integration in finance and healthcare The healthcare sector in India is plagued by several challenges like suboptimal infrastructure, affordability, inadequate insurance coverage, etc. Health care costs are often unpredictable so instant loans through mobile apps for underserved communities
came as a blessing. By integrating financial and health care changes such as digital lending and telemedicine, underserved and excluded populations can access quality health care regardless of their geographical, financial or social status. insurance. When finances are no longer a bottleneck in healthcare, India can pave the way for overall health coverage.
Based on the premise of financial integration, digital lending can take great steps in reducing financial barriers to health care. By getting healthcare and India’s credit -hungry population, digital lending apps can double their customers. That is
most preferred borrowing channel for millennials and Gen Z, digital lending can also be a ray of hope for rural, underserved and marginalized communities with little or no quality access to care health.
Considered to change the current state of the credit starving population in India, digital lending has tremendous potential to drive financial integration through last mile connections. Considering their penetration and India’s growing population, digital lending platforms are almost never wrapped up on the surface and have many miles to cover and many lives will be affected. With the help of new-era technologies combined with healthcare innovations, India can achieve both financial integration and overall health coverage.
The views expressed above are the property of the author.
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