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Phygital Revolution: BASIC Home Loan’s Innovative Approach Transforms Indian Home Lending

Atul Monga, Co-Founder & CEO of BASIC Home Loan, Discusses the Impact of Phygital Solutions in Home Finance

In the evolving landscape of Indian finance, the “Phygital” model—a blend of physical and digital—has revolutionized how consumers access home loans. Atul Monga, Co-Founder and CEO of BASIC Home Loan, has spearheaded this innovative approach, breaking down traditional barriers in home lending. This interview explores how Phygital solutions have streamlined processes, enhanced user experience, and democratized access to home finance, reshaping the sector towards greater inclusivity and efficiency.

Atul, could you share with us the inception story of BASIC Home Loan and the inspiration behind focusing on the affordable home loan space in India?

The inception of BASIC Home Loan in 2020 was driven by a glaring disparity in the fintech sector, particularly in the home loan landscape. While personal, business, and unsecured lending had seen considerable technological advancements, the process for home loans remained entrenched in outdated, traditional banking practices. This observation sparked our mission to transform the home loan experience by integrating innovative technology with a more accessible approach, specifically targeting the untapped potential in India’s affordable housing sector.

Our motivation intensified during the pandemic when the migration of workers from tier-1 to tier-2 cities and beyond highlighted a critical shortage of affordable housing. Many individuals resorted to renting due to the scarcity of accessible home-buying options, underscoring the need for a change. With nearly 17 percent of the world’s homeless population residing in India and millions living in substandard conditions, the urgency to make home loans accessible in less urbanized areas became evident. Traditional banks’ limited presence in these areas further complicated accessibility.

BASIC Home Loan was founded to disrupt this status quo by simplifying, accelerating, and demystifying the home loan process. Over the past three and a half years, we have empowered over 200,000 individuals from diverse backgrounds to achieve homeownership. Our initial steps involved an extensive market analysis to understand the challenges consumers face and the operational models of existing banks and Housing Finance Companies (HFCs). This research confirmed a strong demand for an innovative digital solution.

To address these needs, we developed a user-friendly platform that automates the home loan origination, documentation, and disbursement processes. Our ‘Phygital’ model—blending digital efficiency with physical agent interactions—ensures that we cater to all customer segments, including those less comfortable with fully digital solutions. This approach not only meets the diverse needs of our target audience but also sets a new standard for the housing finance industry, making the dream of home ownership a more attainable reality for countless Indians.

What exactly is the Phygital approach in the context of home lending, and how did BASIC Home Loan come to embrace this model?

The Phygital approach in home lending seamlessly blends digital and physical elements to streamline the loan application process. BASIC Home Loan adopted this model by integrating with bank systems to facilitate paperless applications through their app. Customers receive personalized loan offers via the app and are assisted by on-ground agents for documentation, akin to Uber drivers or food delivery personnel. This approach ensures end-to-end fulfillment, unlike merely passing on leads to banks. The entire process is digitally tracked within the app, offering customers a transparent journey. By leveraging this model, BASIC Home Loan extends its services to even the most remote areas of the country, bridging the gap between traditional banking practices and modern digital solutions.

How has the Phygital model simplified and revolutionized the process of securing home loans for the average Indian consumer?

The Phygital model has significantly simplified and revolutionized the process of securing home loans for the average Indian consumer through its seamless integration of digital and physical elements. Customers have multiple avenues to access our services: they can apply through our website, through direct tie-ups with builders, or via our network of influencers. By recognizing that consumers often seek homes, not loans, we’ve enlisted influencers like property dealers and chartered accountants to refer customers to us.

Once a customer reaches us, we assign them an agent who visits them and inputs their data into our mobile app. This includes demographic, property, and financial information, even fetching their credit score. Our app then compares offers from our network of 85 banks in real-time. With a login-to-sanction rate exceeding 75%, our offers are matured and cost-free, unlike traditional bank applications requiring processing fees upfront. Through integrations with banks, we facilitate paperless applications, making the entire process streamlined and convenient for the consumer. This approach ensures that customers receive tailored offers and enjoy a hassle-free journey towards securing a home loan.

In your view, how has BASIC Home Loan’s Phygital model contributed to the evolution of the fintech space in India, especially concerning home loans?
BASIC Home Loan’s Phygital model has been a transformative force in the Indian fintech landscape, particularly with home loans. By seamlessly integrating digital technologies with personalized, on-ground assistance, BASIC Home Loan has set a precedent for innovation and efficiency in the industry.
Firstly, the model has democratized access to home loans by leveraging digital platforms, allowing consumers from even remote areas to easily apply and access a diverse range of financing options. This has expanded financial inclusion and empowered a broader segment of the population to fulfill their homeownership dreams. Secondly, the Phygital approach has streamlined the application process, significantly reducing the time and effort required for loan approval. Through real-time comparisons across multiple banks and paperless applications, BASIC Home Loan has simplified and expedited the traditionally cumbersome process of securing a home loan.
Furthermore, our model underscores the importance of human touchpoints in fintech, demonstrating that technological advancements need not sacrifice personalized service. This hybrid approach sets a precedent for other fintech companies, highlighting the value of integrating digital solutions with human assistance to enhance customer experience and drive business growth.
What are the key differences and advantages of the Phygital model over traditional home lending approaches?
The Phygital model blends the best of digital convenience with the invaluable human touch, unlike traditional home lending which often relies solely on in-person or paper-based processes. This approach offers quicker service, reducing the time from application to approval through digital data processing and real-time loan comparisons across multiple lenders. It also brings personalized assistance right to the customer’s doorstep, making the complex process of securing a home loan more understandable and accessible. By doing so, the Phygital model breaks down geographical and procedural barriers, making home loans accessible to a wider audience, including those in remote locations.
Looking forward, how do you see the role of technology, particularly the Phygital model, evolving in the home lending space?
Looking ahead, technology, especially the Phygital model, is set to play an even bigger role in the home lending space. As technology advances, we’ll see more sophisticated digital tools making the loan application process smoother and faster. The Phygital approach will evolve to offer even more personalized services, using data analytics and AI to better understand customer needs and match them with the perfect loan options. With the growth of virtual reality, potential homeowners might even take virtual tours of properties before buying, all facilitated through the same platforms that offer home loans. The integration of such technologies will make the home buying journey more integrated and user-friendly. As customer expectations continue to shift towards more seamless, efficient services, the Phygital model will adapt, ensuring that home lending is not just accessible but also a pleasant experience for everyone involved.we6u7i80[
As we look to the future, the role of Phygital solutions in home lending is only set to expand. Atul Monga’s vision for BASIC Home Loan encapsulates a transformative journey that has not only redefined the customer experience but also set new standards for the industry. With ongoing advancements in technology, the Phygital approach promises to further enhance accessibility and convenience, ensuring that obtaining a home loan is not only possible for a wider audience but also more aligned with modern consumer expectations. This journey, led by visionaries like Monga, is paving the way for a more inclusive and technologically adept home lending landscape in India.
Prittle Prattle News composed this article as an Interview.
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