Loan products for Gig-workers in India


Source: Personnel Today

Post the digital revolution in India back in 2016 the Indian economy witnessed several unicorn digital startups flooding the market of over 1.3 billion people. Every business whether Ed-tech, personal Lending, transportation, food delivery has seen startups taking unprecedented growth and thus providing good traction to India\’s gig Economy.

The platform economy has particularly attracted a high number of unskilled and less-educated workers as it provides them with a good source of earning their livelihoods or maybe provide them ease in accessing part-time services to fulfil essential needs by doing tasks that don’t require much qualification. Riding on two-wheelers delivering your favorite cuisines without any delay or working tirelessly to make sure you get the delivery of latest smartphone that you ordered from E-commerce platform these young people make sure wheels of growth are never off track but are gig workers saving enough so that during the times like these they are managing two meals a day or if not are they able to take a loan from Banks without any delay as banks might be not ready to lend to them very easily owing to the fact that the income in freelancing is inconsistent.

In today’s article, we’ll be talking about gig workers and how they can apply for a personal loan. So let’s begin

Who are the Gig-workers?


Source Medium

In India, there are about 3 million gig workers — temporary workers including independent contractors, online platform workers, contract firm workers, and on-call workers. With rising unemployment in the Organized sector, it\’s good to see that more than 56% of new jobs are created by the gig ecosystem.

As per the latest survey conducted by economic times over 40% of the respondents have only studied till 10th grade and did not attend college which largely makes them unemployable for a white-collar job. The work is job-specific and they are expected to perform a fixed task and they’re paid accordingly, workers have the flexibility to work for more than one contractor and choose the hours of work.

The survey reveals that a good majority of 40% earn above Rs 10,000 and 35% of respondents earn close to Rs 10,000 per week to earn their living. Post pandemic more than a third of gig workers were making about Rs 173.5 per day or less which quite less compared to the task they perform on daily basis.

From where do Gig workers borrow?

As I earlier mentioned most Financial institutions are not willing to lend to gig workers due to various reasons like inconsistent income, low CIBIL score, and a lot more. As per the survey, about 40% of customers have a CIBIL Score between 300 and 400, and among them, nearly 20% are not aware of what a CIBIL score is.

An article by Economic times reveals that “Thirty per cent of respondents have taken a loan before and 30% had not taken a loan, almost 20% relied on friends and family for credit and close to 8% have used money lenders in the past. Survey highlights 10% respondents asked their current employer for a loan”

While most of the borrowers do not have earlier access to credit and good credit-worthiness the role of new Emerging digital lending platforms comes into play which usually involves small ticket size loans ranging from ₹10000-₹200000. The new-age lenders usually operate in the unsecured lending space, where lenders give loans to borrowers without any security. These models, which use statistical data and ML-based technology are based on various parameters like past credit history, recent Emi, and credit defaults which helps in increasing the accuracy in predicting the future behaviour of the borrowers.

But the harsh reality less than 10% of the total workforce is updated in regards to the existence of these platforms and are mostly dependent on informal and unorganized sources of Financing. Since commercial banks and NBFCs do not lend as they are not recognized as full-time and formal employees also do not have fixed salaries they get in real trouble in times of emergency.

To Make availing credit a hassle-free and smooth experience MoneyLoji provides the platform from where they can borrow funds for a short period of time and that too with the lowest interest charges in the whole market. The workers need to download the android application and fill in the basic details like name, Address proof, current employment status, amount of funds required, duration them and within 5 minutes the funds get transferred to workers\’ bank Account. The app is directly linked to UPI as well as to their bank account so that payments and transfers are seamless.

Not only does MoneyLoji make it possible for gig workers to access fund easily without the need for documentation like bank account details CIBIL score but they also do so at rates lower than market alternatives and offers assistance in maintaining good credit score.

Conclusion India’s e-commerce market is expected to grow to $200 billion by 2026 and gig workers play an important role in sustaining the growth. More than 70% of them have shown interest in Personal loans and to make sure the life of workers which makes our life convenient  MoneyLoji has made the process of availing credit affordable and accessible.