India the second-most populous country in South Asia. India is the best business hub for money lending. Let’s talk about is money lending business legal in India.
Being populous it is a tourist hub. Setting up a lending business can boom fast and easily. However, one needs plans and strategies.
Money is a scarce resource and everyone needs it. Banks at times take time before granting loans that’s where money lenders come in.
What is money lending?
It is the transaction between two or more parties with an agreement; the lender who gives money and other assets and the borrower who receives the money and assets.
This two-way transaction however has to be agreed upon through terms and conditions. The lender sets terms of lending.
However, the lender expects the money and assets back in with extra. This means an interest that is accepted on the terms and conditions.
Types of money lenders
- Peer to peer lending
This type of lending occurs online and can be governed by a system like Jisort. This means that all transactions are monitored and stored safely.
This type of system connects lenders to borrowers. This type of lending is legal and is governed by law authorities.
- Crowd Funding
A digital world site that connects people who need money to people who have money.
However, unlike other types of funding doesn’t guarantee all money back instead; the borrower gives perks.
One can donate towards a movie studio project and in return, they receive new copies of movies.
- Friends and Family
They are the best to borrow from. However one also needs to be careful when transacting with them.
The Jisort system can help one manage this type of funding. Jisort will monitor and keep all transactions safe, it will also keep reminding the borrower of the due date.
Factors to consider when finding a lender
- The amount of loan
Of course this important because different lenders have different plans. For small loans, friends and family are the best.
When it comes to large sums of money, banks are the best for they offer good rates and flexible payment plans.
- Where to use the loan
Well, a loan should be an investment; don’t just get a loan and use the cash for enjoyment. Utilize it to help you when paying for it.
- Pledged assets
Most lenders especially when giving a lump sum require collateral. This means pledging your valuables for the loan to guarantee you will pay.
In case of default, the lender can sell the collateral to get the money you owe them.
- Repayment plans
This is the duration period. It is different for different loan amounts. Choose a lender who gives you a flexible plan.
It helps one plan and knows how to repay and when. Besides, with repayment plans, one can focus on how to invest.
How profitable is money lending business
It is lucrative. People are making money just by lending money. People want to borrow money flexibly.
Besides, at times banks ask for a lot of information and also take time to approve loan requests. Nowadays people are preferring lenders to banks.
How to start a money lending business in India
- Create a business name
- Business Plan
- Find fund
- Register your business
Above are but a few mentioned plans. For a more in-depth context make sure to read this article.
Is money lending business legal in India
Yes, however one ought to have registered the business under Section 8 of the Companies Act.
The supervising and regulatory authority (RBI) is the registrar. They have the following guidelines:
- Loan rates should not be more than 26%.
- Processing Charge should not be over 1% of the Gross Loan Amount
Well, now we have answered: is the
Did you know you can lend without worries? This means having a system that monitors all transactions as well as keeping data safe.
System? Yes! A flexible and reliable one. An online system that helps you manage all your clients from one place.
So what is this system? Introducing Jisort: It is an online-based platform for automating transactions.
Jisort is used by Microfinance Institutions, SACCOs, Banks, Cooperatives, Credit Unions, Lending Organizations, and other financial institutions.
Jisort system is used to manage clients’ information, keep track of their transactions and generate reports and business statements.
Here is a system demo:
From the demo:
- Jisort is an all-in-one platform- managing clients is easy and fast.
- It is user-friendly- one needs no special skills to run the system.
Money lending is a risky business, one needs a good record. Jisort system will help you keep your data safe.
Why Jisort?
Jisort has been up and running for over 6 years. It has specialized in the development of core banking systems and applications by applying the latest technology.
For this reason, Jisort System has successfully integrated with:
- Banks
- Mpesa
- PesaLink
- Credit Reference Bureaus (CRBs)
- Vodacom
- Tigo
- Among others
Jisort is affordable, for as low as $20, one is able to manage all the clients. It is also flexible in that you can work from anywhere.
Jisort is the best to manage your money lending business. Get started now and reduce workload for efficient productivity.
Lending businesses like many other businesses need to be registered. Registration opens the business to many opportunities like funding and credibility.
However, before starting any business one ought to have conducted thorough research. A plan also is crucial for the business.
Read also: Latest Costs to Start a Money Lending Business in India
