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Breaking Stereotypes: The Future Of Finance And Tech Is (And Will Be) Women

Work culture in organizations is gradually moving towards diversification and inclusion. The current times are witnessing gender stereotypes bring identified and shattered in the wake of gender sensitization and diversity. Organizations across the globe are making concerted efforts towards the goal of equality of opportunity. Still, equality at workplaces is a far fetched dream. Take for instance the case of the US, where: 

Yet they earn lower salaries and fill up fewer seats in male-dominated professions like technology and finance. Fortunately, these stereotypes – those of women typically avoiding math, science and often all things logic – are on the verge of shattering.

A study conducted by the global research organization Catalyst stated that among Fortune 500 companies, the companies which had the highest number of women directors on board have shown better financial results and those having at least three women on their board have stronger-than-average results.

Gender Stereotyping deeply impacts the psyche and confidence of the female workforce. As per research, by the age of 6 years stereotypes regarding intellectual ability take root in girls. Girls identify themselves less with STEM subjects (Science, Technology, Engineering, and Mathematics). At the workplace, women find a less conducive environment to hold leadership and skill-based jobs, share their ideas in discussions concerning these subjects. 

Indian Scenario: Tech

The current Indian scene has begun a positive, and hopefully soon – pretty picture: 

  • Women representation in corporate jobs has increased from 21% to 30% in a span of five years, as posted in  Zinnov-Intel Gender Diversity Study 2019
  • Females are represented higher in non-technical roles at 31%, while in technical roles their share is 26%. 
  • Only 11% of the C-suite positions are held by the women, they were represented at  20% in mid-roles and 38% in junior roles. 
Women's Day

If these stats are compared with the global figures, Indians are surely taking strides in leaps and bounds to cut across cultural misfits and gender Stereotyping issues. As per a NASSCOM study of IT professionals and middle management from companies of Europe and India, 35% of the people with specialist technology roles are women in India as compared to a mere 17% female representation in Europe. 

Several organizations like Oxfam India through its campaign Bano Nayi Soch are all in for progressive ideas that subvert the norms of patriarchy.   

In 2016, Facebook initiated recruitment practices focused on bringing in black and female workers into their workforce – in who now make up 36% of its workforce. Sheryl Sandberg, COO of Facebook and the only woman on their board posits the concept of ‘leaning in’ in her recent book as the idea of being ambitious in any pursuit.  

Kiran Mazumdar Shaw, the CEO of Biocon and the first woman billionaire entrepreneur, reiterates that there is no dearth of talent in meritorious women and even though a small minority, they are well respected and worthy of inclusion. 

Indian scene: Finance

Women are considered excellent investors, but female representation in the finance sector remains meager. A CFA Institute Gender in Investment Management study shows a mere 11% representation of women investment professionals in the industry.  Research across the globe has proved how a culturally rich and diverse workforce delivers optimum results and lower risks for investors. Experts cite several pros of getting the women included in the workforce. 

  • Firstly, female inclusion will tend to bring in newer perspectives into the industry that can usher in a new revolution in the industry. Quality of output and decisions will definitely see improvements. 
  • Gender diversity can lead to innovations and rethinking of the old investment strategies that are sure to impact investment outcomes. 

Several initiatives have been taken to improve the involvement of the females at all levels. For instance, Young Women in Investment, India’s first initiative seeks to create female awareness and interest in the investment management industry. The initiative focuses on presenting investment as a long term viable career option to the women. The success and support of this initiative have definitely paved the way for the inclusion of females in the future of finance. 

Initiatives to Break Stereotypes

While we’re doing well, there can be several initiatives that can make the future of tech and finance into a substantial female-centric arena: 

  • Tech can be leveraged to advance gender parity and women empowerment in a number of ways. The development of the gig economy is offering a contingent workforce that is sure to lessen such gaps in the future. 
  • Unlearning the biases in our mindset and doing away with gender stereotypes will be a daunting task that would demand our attention towards sustainable and all-inclusive economic growth. 
  • A survey conducted by Unilever showed that 77% of men and 55% of women felt that men are best suited for high-stake projects. Such views deeply impact gender parity issues. Marketers and media need to stop the sexist portrayal of women. 
  • Social, political and cultural fronts should take it upon themselves to curb these formative practices of stereotyping and expose both the genders to all kinds of non-traditional fields like tech or finance to let them make their decisions rationally. 
  • There is a dire need to bridge the skill gap among women by taking advantage of digitization and tech innovations. The global “talent shortage” is currently at 38%, with the top ten hardest jobs to fill in STEM professions. The focus has to shift to building competencies and skillsets among women. 
  • Another key area of concern is the online representation of women. There are 250 million fewer females present online as compared to males. Connecting and bringing greater access to regions with no internet can bring about unforeseen opportunities and can even act as catalysts synthesizing women’s inclusion in tech and finance. 

The instilling of the right temperament among the youth holds prime importance as the majority of them make their career choices by the age of 26 as per a survey. Women do not lack in tech or finance skills and knowledge, what they lack is the proper nurturing environment enabling them to fulfill their dreams sans any bias or stereotyping. Once the institutions of today get in sync with gender equality and diversity themes, the potential and opportunities awaiting women in tech and finance can be attained.
And we can surely hope for a feminine era in finance and technology awaiting us in the near future. 

“You are fierce, bold and daring! Also, the best when it comes to caring.”
Happy Women’s Day!

Featured

Spouse In The Same Office: A Closer Look At The Implications for HR

Compiled By: Sandeep Raghunath
About Sandeep: He is the Head of Human Resources at EarlySalary, with 10+ years of international experience in HR across industries.

It is perfectly natural for a professional to fall for another if they’re working in the same office, or are spending a significant amount of time together. Open and vulnerable conversations are fairly likely to occur, and the more familiar they become with each other, the more potential there is for mutual attraction. While they may be frowned upon, relationships within an office setting are far from uncommon. Some partners even often end up getting married. 

In this context, however, the HR function isn’t expected to remain out of the loop. Organizational policies, cultural sensitivities, etc – there are many factors influencing the HR functions’ role in managing professionals with a spouse in the same office. How can they approach this? Let’s look at some important aspects.

Disclosure of relationship

It is vital to maintain an environment where it is known that keeping a relationship or marriage secret is not in the interest of the company and can have larger implications. According to Sarah Churchman, head of diversity and inclusion and employee well being at PwC, the only way to manage relationships is for the couple to be totally out in the open. “If they don’t inform us, someone else in the department will. Not because they are necessarily behaving in an inappropriate manner, but simply because they may fear a problem with favoritism.”

Some enterprises have a policy in place allowing for managers to be demoted, transferred or even dismissed in the case of the manager being in a relationship with their direct report without disclosing the same. It is, therefore, essential that an office couple is made to sign out a disclosure form with the HR Department. This allows for a line of communication between the office and the parties involved and also serves as a formal notice of their relationship. It also prevents misinformation and rumor-mongering in the workspace which hampers productivity. 

Different organizations have varying HR policies on how they deal with a spouse at the same office. If a company is strictly against work relationships, one of the spouses can be dismissed, though it would not be a popular move and discourage transparency. “You can’t legislate against office romances or indeed falling in love, and an outright ban would be totally unworkable,” says Churchman.

It is imperative for a company to have a policy on office relationships and furthermore ensure that all employees, especially spouses, get familiar with these and abide by them at all times during work hours. This includes coffee breaks, lunch breaks, business trips, etc.

Personal life and Professional life

The need to maintain a professional relationship between spouses in the same office space is vital. Often, the hardest battle in managing office relationships is inculcating the need to strike a balance between personal life and professional life. According to a research “on flirting at work” conducted by Amy Nicole Baker, an associate professor of psychology in University of New Haven, and an author on workplace romance papers, it was found that people who frequently witness other colleagues flirting often feel less valued by the company and have a decline in job satisfaction. This feeling of discomfort can also lead to many quitting their jobs. In order to prevent others from being uncomfortable and thus putting oneself under the radar. 

Spouse In The Same Office: A Closer Look At The Implications for HR
“Open and vulnerable conversations are fairly likely to occur, and the more familiar they become with each other, the more potential there is for mutual attraction”

Public displays of affection and flirtatious conversations can disrupt the working of the office and reek of unprofessionalism. It is essential to treat your spouse like a regular colleague within office hours and even in work parties, off-sites and other such events which are an extension to the office workspace.

Senior-Junior Relationship

In the case of a senior and subordinate getting married, the need for professionalism is critical in order to prevent conflict of interest. According to most office guidelines – it is necessary for the senior spouse not to be involved in the appraisal or evaluation of their partner. The two must not work together in the same department in order to curb the space for favoritism and nepotism within the workspace. There is also a potential threat to the security of confidential client information and the risk of information leaks.

To avoid the occurrence of favoritism, one spouse should be transferred to another department, and ideally, no couples should work together in the same department.

Divorce

The unfortunate scenario of a married couple splitting up can have deep repercussions on their work ethic, their behavior in the office as well as the office environment itself. The disclosure form should specify what would happen to both the parties in case of this occurrence. The way two ex-partners are treated in the office also deserves attention. They might act in a more isolated nature and may be unable to maintain good performance. This situation is a nursing ground for potential blame-game and office politics. This difficult period of the employees’ life should be battled with care and acceptance. They might not need advice and might need someone to listen to them in order to clear their mind and concentrate during work hours. In case of poor performance, they should be nudged towards the direction of working better and given gentle reminders instead of indifferent statements like “Your divorce is not our problem.”
Perhaps an Employee Assistance Program to help deal with such traumatic instances is worthy of consideration from employers.

Featured

Can Millennial Stress be Resolved by Financial Wellness?

Stress is an issue bigger than ever for millennials, who are rushing ahead with their worklife, finding little time to enjoy the intricacies of life. They are not only toiling themselves with projects, preparing reports and meeting targets, but also when off the work they busy themselves worrying about their debt, savings and expenditure.  India has been, off late, a very volatile economy with companies shutting down production and filtering out chunks of employees. As such millennials are forcing themselves to work in return for poorly paid salaries and unsatisfactory job environments. In most of the cases, they are not able to manage their day-to-day expenses and have to revert to debt; while in other cases are confused about their financial course.

A whopping 76% of Millennials say they are experiencing financial stress, up 23 percentage points from 2018, according to the PwC 2019 Employee Financial Wellness Survey.

Financial stress is the top contributor in affecting employee health and morale followed by their jobs and relationships. Matching your salary with your expenses is only the tip of the iceberg, when cash flow and debt issues add to the worries. Employees are worried that they are not able to save enough and will face or are facing a financial crunch. Let’s look at the major issues hounding today’s millennials in terms of finance:

Past concerns  

With higher education becoming more expensive each year, an increasing number of new employees enter the corporate sector already laden with the burden of huge debt in the form of education loans or personal loans. As per Workplace benefits report 2017, 40% of millennials say that they left high school and college unprepared for the real world. As such they look upon their employers for the necessary guidance and help related to a majority of topics around financial wellness. 18% of millennials want more help with their student loans.

In some cases, these debts may be gifted down from one generation to another. A son may have to pay off a home loan or some other debt incurred by his father. These circumstances dilute the finances and millennials find it difficult to lay away the stress.

Present concerns

According to the 2017 Workplace Benefits Report, a significant number of Millennials say they feel unprepared to manage their finances and need help with topics across the financial wellness spectrum, including saving for retirement (43 percent), general savings help (40 percent), paying down or managing debt (34 percent), saving for major expenses (36 percent) and budgeting (31 percent). 

Peer pressure, maintaining the status quo and lavish lifestyles often lead millennials to the brink of a financial crisis if they do not plan their finances well in advance. Many are highly ignorant about how to proceed with investments; banks or mutual funds, long term or short term, commodity or shares, and a lot more. About 43% feel that they require more help with investing, 40% wanting more information on how to save taxes and 21% feel that they want to save more. It’s an additional issue when they require funds in a lump sum for unforeseen expenditure or a major purchase. They either trap themselves in instalments or else fall in a debt trap. 63% of Millennials consistently carry balances on their credit cards and two out of five have trouble making minimum monthly credit card payments.

Future Concerns

Besides provident fund schemes, gratuity and a few other benefits, employees aren’t assured adequately about their future. They remain concerned about their retirement and pension, their children’s education, medical expenses and a lot more. Pension schemes are offered by insurance firms, but which one is best suited remains a matter of concern. Career opportunities and growth also impact future and present decision making. Not surprising then that employees, especially millennials, find themselves to be dependent on their employers.

Why should employers take up financial wellness programmes?

Financial stress not only impacts an employee on a personal level, but his working capabilities and mental faculties get impacted too. Stress can be behind severe health concerns that may lead to employee absenteeism, employee turnover, and dissatisfaction. The issue of financial health becomes of utmost importance to keep the solubility of the firm intact on one hand and to achieve common organisational goals on the other. As per a survey, an employee spends 12 hours on an average each month stressing about their finances. 

Bank of America Merrill Lynch report says that the lack of confidence in financial matters affects Millennials’ workplace behavior. On average, employees spend 3 work hours each week (12 hours per month) dealing with financial stressors.

A well thought of and structured wellness programme may act as a tonic for the employees’ financial health:

#1 Making an in depth study of employee concerns before finalising on the mode the financial programme is critical. Not everyone shares the same crisis, and not everyone will desire third party approvals or advice before taking decisions. A financial assessment is essential before you initiate the program and want it to succeed. This can be an eyeopener for those employees who may have been unaware of the causes of their financial stress and will make them ready to adopt the new financial course.

#2 Educating employees about financial health and other resources should be taken care of as well. This can be one through seminars, online courses, or even lectures and classes conducted by an expert or professional.

#3 The employees must be educated on healthcare costs as well. It doesn’t hurt to take this opportunity to promote healthier lifestyles as well. This can save them a lot in the long run. Group insurance schemes and health insurance schemes should be encouraged as a norm in the organisation.

#4 Financial debt management, especially the management of student loans, is another area of focus. Employers, if possible, could even consider taking it upon themselves to sort out the education loan or debt of the employees as a gesture of goodwill. This can be offered as an employee benefit as well. Executed right, the company can go a long way in earning the reputation of being the best in class when it comes to their employees’ welfare.

#5 Then comes the basic question of managing the current expenses such as installments, deductibles, premiums and other expenses. There are several paradigms involved in financial planning and it can be overwhelming for a millennial who has just been placed on his job.

Encouraging employees to take part in these programmes and letting them get involved through participation, and one on one discussion will assist them in reducing their financial stress. The overall focus of the employee can shift to organisational task boosting his productivity and overall efficiency. At the individual level, it will boost their confidence to manage their current expenses and plan for their future expenses in advance. Financial wellness programmes can, therefore, help in improving employee health and quality of life. A healthy and financially sound human resource can be an unending source of profitability and efficiency for any enterprise.

Income Tax Deadlines Approaching: Here’s An Essential Checklist to Maximise Savings

Besides the fact that taxes are often perceived as a financial burden, a lack of awareness about financial planning only adds more to the stress. A majority of taxpayers fail to fit the tax-saving piece into their financial puzzle. Maybe it’s time to teach students taxes when they’re still in school to train them for the unavoidable taxes as adults.

If this is something you can relate to, then fear not. To ensure your tax-planning journey is smooth sailing, we’ve compiled a comprehensive and elaborate tax-saving guide.

How can you save tax: A brief insight on the Income Tax Act

In 1961, the Income Tax Act came into effect. All activities relating to the collection, imposition, administration, and recovery of tax on income are covered by the Income Tax Act. Over the years, it’s of course, gone through several changes, the latest being its divergence into old and new tax slabs.

Being a taxpayer, you will have several income sources, and your income or gains in a given fiscal year incur taxes.

As an individual, you have to pay taxes to the government, whether you are an employed person or an entrepreneur. While you’re at it, here’s how you can indulge in some tax saving, particularly under section 80C and 80D of the Income Tax act.

  • To limit your taxable profits, do remember to use section 80C to your advantage. Made any investments in a PPF? Or an ELSS Mutual fund perhaps? Section 80C will allow you to shave off up to Rs 1.5 lakhs from your taxable income. 
  • Purchase medical insurance & assert a premium exemption on medical insurance of up to Rs. 25,000 (Rs 50,000 for Senior Citizens) under Section 80D.
  • Do remember to claim a deduction under Section 80EEE of up to Rs 50k on your home loan interest.
  • If you don’t have many deductions to claim, seriously considering opting for the new income tax slabs to lower your effective tax rate. Check out this official old slab vs new slab tax calculator to determine which one saves you more tax!

Checklist to follow while preparing your ITR

The following are some of the key items to note when filing income tax returns

1. Quoting Aadhaar is mandatory 
India’s Supreme Court asked the government to make quoting Aadhaar compulsory for all citizens. Thus, when filing the income tax return, the taxpayer must mention all the digits of the Aadhaar number or the Aadhaar enrolment number. 

2. Main Changes in FY16-17 ITR Forms 
Some changes have been made by the tax board. Firstly, from nine to seven, the quantity of ITR forms has been reduced. Only ITR 2 is in use now. 

3. It is critical that all bank account numbers and IFSC codes are listed by taxpayers in their ITR. However, it is not appropriate to note inactive accounts that have been in-operational for the last three years. 

4. By now, all individual taxpayers from their respective employers must have obtained their Form 16. Type 16 is the employer’s certificate. It has information on the wages paid to you by them and the taxes deducted from it. Form 16 shall be issued on or before May 31 of the next year, once for a specific financial year. The taxable pay referred to in Form 16 shall be included in the income tax report under the pay head. 

5. It is possible to download Form 26AS from the income tax website. This form has all the TDS that has been deducted from your income(s) in detail. It requires TDS deducted on wages and the same can also be seen in this tax credit statement when there is any TDS deducted on fixed deposit interest.

The Relationship Between Taxes & Financial Wellness

Financial wellbeing or wellness, in very basic terms, refers to the practice of handling one’s economic life effectively and efficiently. Financial well-being is a blend of understanding your investments, making sound financial choices, and consolidating other significant aspects of your life with financial decisions. 

As you can guess, an optimal state of financial wellness would involve prudent tax decisions that not only save you money but even generate more income via investments. After all, financial wellness means the ability to successfully handle short-term finances and simultaneously plan for the achievement of long-term objectives.

So whether you’re filing your taxes for last year or planning for this one, some tasks are consistently worth remembering to do:

1. Have the right budget that factors in both savings and investments.

2. Keeping a tangible track of all documentation, bills, etc. to avoid last minute delays or even losses.

3. Don’t over-optimize your budget so save taxes. Be financially prepared for any emergency of any sort.

But perhaps most importantly, be ready to leverage the right tools to assist you financially whenever the need arises. For example, EarlySalary’s Credit Suite will be at your service for all needs – from instant, short-term loans and free credit score checks, to a class-leading SalaryCard that allows you to pay on the go. 

In other words, taxes or no taxes, savings or no savings, you’re well-covered for all financial eventualities with the EarlySalary Credit Suite.

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:
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All You Need to Know About Investing in Mutual Funds- for Beginners

Investments ensure the long-term financial security, which is why investing a portion of your earnings is one of the most important things you can do. Aspiring Indian professionals of today recognize that along with contributing to a financially secure future, investments can also be a steady source of income. Their returns can be channeled into several financial goals. And when investments fall short, there are always comprehensive solutions like the EarlySalary Credit Suite ready to serve them.

Mutual funds are a diversified way of growing your savings while also minimizing tax liability. In the past decade, they’ve become a mainstream investment option, with people from a wide range of financial backgrounds putting their faith in them. 

However, there are still people who are willing to invest in mutual funds but are hesitant on how to proceed. Worry not, though. In this post, we’ve compiled all the information you need to know before making your first mutual fund investment. 

What are Mutual Funds? 

First things first: a mutual fund, in case you’re unaware, is an investment instrument where you put in your money for increased profits. Your investment is pooled with those from other investors and managed by a group of skilled financial experts. 

Mutual funds are overseen by an asset management company – or an AMC. The AMC takes funds from the investors and channels them into a varied assortment of assets (stocks, bonds, commodities, etc.). The returns are distributed in proportion to the investor’s contributions.

There’s a broad selection of mutual funds available for investors to choose from as per their goals and risk appetite. Now, we’ll be taking a look at some of the conventional types of mutual funds. 

What Are the Different Kinds of Mutual Funds? 

Mutual funds are sorted into different categories based on quite a few factors, including but not limited to the asset class, their maturity periods, and fund structures.

Based on the asset class, mutual funds can be generally divided into the following categories:

  • Equity, or Stock Funds: 

By far the most popular mutual fund type among investors, equity funds invest in the stocks of different companies. Equity funds themselves can be divided into several categories based on the sort of equities they invest in. For instance, based on the size of companies being backed up, equity funds can be large-cap, mid-cap, and small-cap.

The SEBI (Securities and Exchange Board of India) has sanctioned 11 categories of equity mutual funds, such as Multi-Cap funds, ELSS (Equity Linked Saving Schemes) for tax benefits, and more.

  • Debt, or Fixed Income Funds: 

A debt mutual fund generates interest income by investing in instruments such as government bonds, corporate bonds, etc. SEBI has listed 16 types of debt funds in total. For example, short-duration funds, liquid funds, Banking & PSU Fund, etc. 

These invest in both debt and equity MFs, as well as other related instruments. Hybrid funds aim to strike a balance between risk and good returns.

The SEBI categorizes hybrid mutual funds into 7 kinds, such as the Conservative Hybrid Fund (investing in debt), the Aggressive Hybrid Fund (investing in equity), Balanced Hybrid Fund, and more.

Mutual funds based on maturity period: 

  1. Open-Ended Funds: Open-ended mutual funds allow investors to buy units or sell their holdings whenever they want to. There’s no fixed maturity period. Most mutual funds available in the market right now are open-ended.  
  2. Close-Ended Funds: Close-ended mutual funds have a specific maturity period. Investors can only invest before the fund launches and cannot withdraw their money at any point of time during its run. 
  3. Interval Funds: Interval funds bring together some of both open-ended and close-ended funds’ characteristics. They allow investors to trade units at predetermined intervals during the fund’s run time.

Modes of Investment in Mutual Funds:

There are several methods to invest in a mutual fund scheme, although the most popular are:

  1. Lump-Sum Investment: Through a lump sum investment, you can invest the entire amount in one go.
  2. SIP: With a SIP, or a systematic investment plan, you can deposit a fixed amount at regular intervals.

How to Choose the Right Mutual Fund for Yourself

Before you select a mutual fund for yourself, consider the following factors:

  1. AuM, or Assets under Management: This is the total value of assets a mutual fund holds at any given point.
  2. NAV, or Net Asset Value: The NAV is the value per unit of a particular mutual fund at a specific point in time. Whenever there is a change in a funds’ asset value, the NAV shifts, thus determining whether there’s profit in the investment.
  3. Expense Ratio: The total estimation of the fund management fee, and the additional costs of running a mutual fund. The annual operating fees are a small annual percentage (1% to 3%) of the invested funds.  
  4. Entry Load: The fee charged when you make an investment in a mutual fund. 
  5. Exit Load: The fee charged for redeeming holdings before a specific time period. 
  6. Lock-in Period: The time period for which you cannot withdraw your investment. The lock-in period begins on the date of investment, or may not exist at all.
  7. Holdings: The contents of an investment portfolio of a mutual fund. For instance – all the companies whose stocks are bought by an equity scheme.
  8. Date of Inception: The date on which a mutual fund was launched would help you evaluate its performance over specific periods of time.
  9. Returns: Checking the profits/losses of a mutual fund scheme over certain time periods (e.g., 1 year, 3 years, 5 years) would help decide if you should invest in that scheme.
  10. Risk: Find out what kind of risk a mutual fund scheme anticipates to see if it matches your risk appetite.  
  11. SIP: If you plan to start a SIP, find out the minimum SIP rate for the MF plan.

How Are Returns from Mutual Funds Taxed in India? 

Your earnings out of a mutual fund investment count as a form of income (capital gains) and therefore are taxable. Depending on your MF scheme and the duration of your investment, your payable tax would vary. 

The tax rates for equity and debt funds – two of the most sought-after MF schemes – are listed below:

Mutual
Fund Type
Short-Term Capital
Gains Tax
Long-Term Capital
Gains Tax
Equity
Funds
15%10%
(without indexation)
Debt
Funds
According to
your income tax slab
20%
(after indexation)

How Can You Make a Mutual Fund Investment? 

There are quite a few ways you can invest in a mutual fund. Here are the most common ones:

  1. Online Portals
  2. Directly through the AMC
  3. Through an Intermediary

And there you have it, a guide to mutual fund investments that will hopefully be of help! While this was by no means comprehensive, we do hope it’s given you the knowledge you need to start out as a mutual fund investor and plan your investments better. For all other needs, there’s the EarlySalary Credit Suite!

Happy investing!

How financial stress impacts job performance

Stress is a universal issue, impacting professionals across sectors, designations, and organizations. It severely deteriorates an employee’s work performance and comes in different forms and shapes. Take financial stress – featuring challenges in meeting loan EMIs, or managing the usual daily bills at times. As any leader may guess, this can be a huge detriment to overall organizational productivity. 

But before we figure out how to deal with it, it’s important to know what causes it. Here are the most common causes of financial stress professionals of today must face:

Causes

  • Excess Debt: Taking too many loans at a time has people drowning in a sea of debt. Even before one debt has been paid up, another is taken. A certain life of thrift pushes folks towards taking too many loans and paying up huge credit card bills. The amount is often not small, and so is the interest.
  • Way of living: The current living standards all over have increased with the coming of easy EMIs. People are trying to keep up with a glorified idea of a lifestyle. But everything comes with a price. And this price becomes a big cause of financial stress at a later stage.
  • Insufficient savings: Despite a better stand of living, there are many of us living an urban equivalent of hand-to-mouth sustenance. Of course. And even if any savings are made, a thrifty nature ensures that even it is spent. In the end, all that remains is repayment.
  • Instability of markets: With a wide variety of changes taking place in the market, it has been difficult to keep your market parked with it. Risks are being taken without proper inspection which generally leads to losing lots of money in the financial markets.
financial stress, financial wellness
  • Inadequate financial literacy: The majority of people with financial stress include millennials and youths. Being a newbie in the financial world, they aren’t very much acquainted with the nooks of their finances and are prone to hasty decisions. This reduces their chances of gaining success with money, thereby increasing their financial stress.
  • Personal Issues: A sole bread-winner of his family needs to take care of their finances well. The satisfaction of everyone’s needs creates a dearth of finances. Further in cases of emergencies like illness, accidents or any similar condition suddenly would send a surge in the need for financial assistance
  • Other issues: Since some consumers are quite vulnerable due to their lack of financial knowledge, some institutions may take undue advantage of this, with high-interest rates, expensive prepayment charges, and more. As you can guess, this compounds the situation instead of making it any better.

Impact

  • Reduced productivity: Financial stress hampers mental health disabling better attention and thinking. This finally leads to a fall in productivity by an individual employee, and consequently a bigger fall for the organization in terms of productivity.
  • Absenteeism: Regular mental breakdowns of the employee lead him to take excessive breaks. This also adds up to increased absenteeism among the employees.
  • Disruption of health: Severe health problems can occur due to financial stress. Sleep disorders, headaches, heart ailments, hypertension are some of the possible impacts of financial stress. Further, stress clogs down the functioning of the brain which might lead to a bigger eventual shutdown of the body.
  • Lesser control: An employee gripped with financial stress has lower control over their mind and body. Unhealthy lifestyle habits, substance abuse habituation,  and more become part of the package. 

It’s easy to see how any, or all of these can be significantly detrimental to an organization’s output. A professional with any of this background is a professional very unlikely to be delivering their 100%. 

How can organizations combat this?

  • Greater focus: A keen observation and look out for stressed employees will certainly. Understand the causes of financial stress and think of ways to help them.
  • Be empathetic: As a manager, put yourself in your employee’s shoes. Think about how you would have liked to be treated if it were you. Take care of your team in a similar way. Talk, counsel, and care.
  • Undertake financial wellness programs: Several service providers offer financial wellness and assistance programs as an ongoing attempt to combat such issues before they arise in organizations. Partner with them and try making appropriate changes. EarlySalary’s Financial Wellness service helps employees remain fully secured in financial terms. Be it a medical emergency or paying a child’s school fees, EarlySalary has got you covered, thanks to a keen understanding of the importance of financial education and experience in assisting under-served customers, with seminars on financial wellness, and support for instant credit, as part of the EarlySalary Credit Suite – a newly launched offering for aspiring Indian professionals of tomorrow.

When is your Organisation Getting Started?

Financial stress is a burden most young professionals face. In the modern world, however, a support system, with tech tools and concerned mentors and managers, can make the experience far easier to deal with. Undertaking better policies and programs will not only help in employee’s welfare but consequently help in getting closer to the organization’s future goals.

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How Secure is my Personal Data With Instant Loan Apps?

Gone are the days when you had to toil for procuring an instant loan. With the availability of instant loan apps, you can easily avail of quick personal loans right through the comfort of your device. Apart from being instantaneous, the fact that the loans are usually uncollateralized has led to the unprecedented popularity of instant loan apps. 

The borrowers are required to submit information like KYC documents, income receipts, and then they can get the loan amount based on the eligibility criteria. While from a borrower’s viewpoint, the swiftness with which the loan amount is disbursed looks commendable, it might raise flags for some. Questions like is my data secure or what will the apps company do with the data provided might become a recurring thought. Let’s find out answers to these pressing questions. 

Security of Personal Data

In the time when personal data gets treated as a digital currency, apprehensions regarding its safety are quite legitimate. Any leakage of personal data, whether KYC documents or banking details, can be catastrophic. The level of security of your data depends on both of the following factors:

  1. Genuinity of the instant loan app company. 
  2. Security measures employed by the loan provider. 

The chances of your data getting leaked and misused depend on these two factors. Let’s take a look at each of them.

#1 Genuinity of the instant loan app company

The first step to ensure that your personal data is secure is to select a genuine loan provider. You have to make sure that the loan provider is a certified entity and not a scammer luring you with a promise of a high loan amount at just a small interest here. Here are a few through which you can verify the legitimacy of an instant loan online portal

  • Verify the information presented by them

A key requirement of every company is to have a physical office, whether your business is offline or online. You should seek out their contact and address details from their website and then verify them for their authenticity. You will get an idea if the company exists or if it is a mere bogus being run by fraudsters. Also, contact the number provided to understand the legitimacy of the company.

  • Check for crucial nuances on their website

The website of the company reflects its intentions as a business. If their website is protected and encrypted, it’s a positive indication of a genuine portal. However, if the website is unprotected and your browser lists security concerns, then that more or less gives you a picture of what you can expect. You can verify the encryption of a website through the address bar. If there is a ‘lock icon’ next to the address and its URL starts with ‘https’ instead of ‘HTTP’, then the website is encrypted and secured.

  • Beware of the scammers

Scammers offer you such inciting deals that you might consider them unbelievable. Such out of the world deals are usually a scam to dupe you out of money and your data. Watch out for scams like asking for a pre-processing payment, or directly giving you a loan without a background check. It may look exciting but always trust your hunch.

We have covered this more deeply here. Now, this brings us to the next part where a security lapse can occur. 

# Security measures to keep an eye out for

instant loan apps

While your instant loan portal can be a genuine entity, you’re still under the radar of data theft and misuse if the portal does not have effective security features. 

  • Talk to the loan portal

You should not hesitate about contacting the loan portal and getting all your doubts cleared. Get a clear picture of what tech is being used to store the data and protect the transactions. At EarlySalary for example, all data is encrypted and all its potential usages clearly outlined in our privacy policy. 

  • Research about the portal and technology used

As a rule of thumb, always read community reviews – both good and bad ones. You will get an idea about the shortcomings of the portal. If multiple individuals have raised the issue of data breach and security concerns, then think twice and look for alternate choices available. Also, read about the tech employed by the instant loan app to understand any flaws in the system.

  • Third-party involvement

Also, check whether the company is involving a third party entity to offer you the loan services. Check out what information is being shared with these third-party companies and verify if these entities are genuine. It’s at this point that most data changes hands and is often monetized.

Personal Steps to keep your data safe

Since this information is in the public domain, fraudsters and scammers too have access to study and learn from it. It, therefore, requires both vigilance and awareness from your end to ensure that your data is in safe and secure hands. Watch out for all the flags, if any, raised by an instant loan provider. Also, do not hesitate to ask about the security measures employed by the company. 
At EarlySalary, we not only disburse your loans quickly, but we also keep your data secure. Millions of dollars disbursed across hundreds of thousands of satisfied customers are a testimony of our commitment to client satisfaction and their data privacy. With the presence of the latest security measures, you do not have to worry about your data at EarlySalary.

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:
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The best ways to save on big purchases this shopping sale

The festive season is finally here, and it brings with it much-awaited shopping sales. With the global pandemic, there has certainly been a slump in the economy as people have put off making big purchases. But as the economy restarts again, e-commerce giants like Flipkart and Amazon have geared up for major shopping sales. Let’s see how we can save big on these sales.

#1 Look out for coupon codes

One of the most significant discounts one can get is through coupon codes. While some coupon codes are already listed on the checkout page of a website, others may be obtained through awards, promotional offers, etc. It is important to consider that oftentimes, it is only possible to apply one coupon code to the transaction. Also, some coupon codes might offer a high discount rate but only up to a certain limit, while others may offer a lower discount rate with a higher limit and a minimum purchase value. 

Big purchases often clear the minimum purchase value cut off, which means that there is a wider choice of available coupon codes. Therefore, for significant savings, you must strategically choose the most appropriate code.

#2 Benefit from your reward points

Many stores and e-commerce websites (and even your payment methods) have a system of reward points. If you are a returning customer, you may have some reward points accumulated in your account that you can redeem at the time of purchase. 

An interesting example is Flipkart, which offers Flipkart Supercoins on every purchase and these can later be used to buy select products or to avail a Flipkart Plus membership. 

#3 Which payment method is the best?

Some stores or websites may offer special discounts on certain credit cards or debit cards, such as 10 percent off on an ICICI Bank card or an HDFC Bankcard. This could vary for different shopping sales and websites. Others may offer discounts if payments are made through online wallets, such as Paytm or PhonePe. 

Whether it’s credit cards, mobile wallets, or UPI transactions, selecting an appropriate payment method can offer better savings.

shopping sale, save

Perhaps the best payment method is the Salary Card from EarlySalary. A crucial component of the recently launched EarlySalary Credit Suite – it allows you to convert your purchases into no-cost EMIs at the click of a button.

#4 Price Comparisons: Is your wishlist really on a discount?

A lot of discounts depend on shopping from the right place and on the right day. Prices can fluctuate on a daily basis and across platforms. A good way to keep track of these can be by setting up price alerts. 

For comparing prices across e-commerce websites, you can also use price comparison apps and websites that track price changes of an item and allows you to see if you’re indeed getting a good deal or not.

#5 Consider EMIs or instant credit

Oftentimes, an EMI option can prove to be a better deal. A scenario where a massive price drop occurs during a sale sometimes cannot be missed and for this, considering instant credit options or EMI could pay off. EarlySalary offers low cost and flexible EMIs for shopping at Amazon and Flipkart.

What are you buying?

Making any large purchase is hardly ever an instantaneous decision. It involves weeks or even months of thought and planning. It is always important to research the product, compare its features with other versions, and get a reasonable idea about its price. But with such extravagant shopping sales, coupled with class-leading credit solutions from EarlySalary, you’d be the odd one out if you’re not out grabbing those deals.

That doesn’t mean you shouldn’t take into account the multiple factors that go into getting the best deal, such as choosing the perfect product, considering the shipping costs, warranty period, accessories offered, and installation charges wherever applicable. Interacting with friends, checking online shopping communities, and maintaining a general awareness about discounts and cashback offers can be of great help for getting the best offers during this shopping season.

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:
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Know what your credit score says about you

Based on your loan history (of all kinds), a credit score is a number that measures and rates your financial health. To decide whether to accept someone for a loan or credit card and to determine what interest rate to charge, lenders use credit scores.

In order to decide whether to rent your house, give you a job, or how much to charge you for car insurance, other businesses may also use your credit score.

Let us understand what credit scores really are

The credit score ranges between approximately 300 and 850. “Good” scores are considered in the range of 600. When you have a higher score, you have a greater chance of being accepted for loans in more favorable conditions. You can visit the EarlySalary Free Credit Score check to get an idea of your credit scores. The free credit score facility is also part of the EarlySalary Credit Suite – a complete offering for aspiring Indian professionals, featuring Instant loans, a Salary Card, and much more!

There are two types of credit scores –  generic & custom scores:

  1. To assess general credit risk, credit scores are utilized by several forms of businesses and lenders. Using the same formula for all three credit reporting agencies, you can access the generic score as one score.
  2. Custom scores are for individual lenders. It relies upon credit score reports and other data from the lender’s own portfolio, such as account history. These are unique to a single organization or may be used by specific forms of lenders. For specific types of lending, for example, mortgage or auto loans, custom credit scores can apply.

What Kind of Borrower are you: What a Credit Score Reveals

  • History of Payments

When they give somebody money, there is one main question that lenders have in their minds: “Will I get it back?”

The following factors are taken into account in this portion of your score:

For each account on your credit report, have you paid your bills on time? Paying late has a detrimental impact on your ranking.

How late were you—30 days, 60 days, or 90 + days if you paid late? The later you are, the worse your score is.

Have some of your collection accounts been sent to you? To potential lenders, this is a red flag that you could not pay them back.

  • Owed amounts

This second-most critical portion discusses the following considerations:
How much would you intend to give on those forms of accounts, such as mortgages, car loans, credit cards, and payment accounts?

How much do you owe in total and how much do you owe in installment accounts as opposed to the original amount?

How much did you use your total usable credit? Nothing is better, but owing a little can be better than owning none at all. That way, lenders get to see that you are accountable and financially secure enough to pay it back if you borrow money.

Credit Score
  • Credit History duration
    How long you’ve been using credit also takes into account your credit score. You’ve had commitments for how many years? What is the average age of all your accounts and how old is your oldest account?
  • New credit
    The credit score takes into account how many new accounts you’ve got. It looks at how many new accounts you have recently applied for and when you opened a new account for the last time.
  • Credit forms in use
    If you have a combination of various forms of credit, such as credit cards, store accounts, revolving loans, and mortgages, is the final thing you consider when deciding your credit score. It also looks at how many accounts you have in total. As this is a small component of your ranking, don’t worry if you don’t have accounts in any of these categories, and just increase your mix of credit types by not opening new accounts.

Small tips to keep in mind while you apply for a loan

  • Pay the bills on time, and don’t be more than 30 days late if you need to be late.
  • Don’t open lots of new accounts all at once or even over a span of 12 months.
  • If you plan to make a big purchase, such as purchasing a house or a car, which would require you to take out a loan, check your credit score about six months in advance.
  • Keep the balance of credit cards below 15-25 percent of your total credit available.

Do you always need a credit score?

Although your credit score is important for getting accepted for loans and getting the best rate of interest, to get the kind of score that lenders want to see, you don’t need to stress about the scoring criteria. With credit solutions like EarlySalary that offer more than just instant loans, there may not be any reason for you to consider a traditional lender. EarlySalary’s Credit Suite is a revolutionary new all-in-one package for aspirational Indians of this next decade. With a free credit score facility available instantly, there’s also:

  • Short term, Instant loans with ₹8000 to ₹5 lakhs limit
  • Long Term Personal Loans with the 12-months to 36-months EMI options
  • Free credit score facility for a detailed snapshot of your credit financial position 
  • All-new digital EarlySalary Card with customized credit solutions customized features
  • Buy on EMI functionality so you can ‘Pay Later’ during checkouts.

Sure, your score will shine if you handle your credit wisely. But your finances can shine without a credit score too!

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:

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Download the EarlySalary app here, or simply log in to our website and be aware of your credit scores.

A Salary Advance, Now On A Card: Introducing The SalaryCard

The fintech sector has come along in the last half a decade. And so have our aspirations. Those of us fresh into our careers back then have evolved from young professionals building our lives, to aspirational individuals propelled by our own ambitions. In this period, EarlySalary is proud to have been a true partner – with its rapid, simplified credit access to millions of young working professionals. 

With EarlySalary, while it’s been possible to access a simple solution for all that you desire, we’re now announcing some major upgrades to serve you for this next phase of your financial journey. 

We’re announcing the instant, hassle-free SalaryCard.

What Is The SalaryCard?

Over the past 5 years, EarlySalary has grown to become one of the largest consumer lending FinTech brand in India, having disbursed over 1.7 Million loans, powered by a fully automated and ML-based decision system that allows thousands of loans to be disbursed each day.

Clearly, expanding credit access has been our overriding agenda. So it was only logical that we follow it up with a tool that further simplifies and expands credit for the country.

In the spirit of true digital India, by Indians, and for Indians, we’re delighted to introduce the Salary Card. The Salary Card is designed to be as mainstream as every other financial instrument – it is powered by RuPay and NPCI payment platform. But simultaneously, it’s also a cut above the rest by being entirely digital – no manual underwriting, no long wait times in your applications like with all other banks. 

But let’s move to what matters most – the SalaryCard’s core functionality:

  • The Salary Card is a prepaid instrument that allows your transactions to be automatically converted into flexible EMIs ranging from 3 to 12 payments, with zero prepayment charges. 
  • Gone are the days of Kafkaesque paperwork and hassle to secure credit for our ambitions, whether it’s the latest gadget or even our kids’ education. The SalaryCard allows you to directly transfer the fee to the educational institution from your credit limit with zero paperwork. 
  • It’s extremely easy to manage with your EarlySalary mobile application. The maximum limit is roughly equal to your monthly salary. But you can also set dynamic limits. In other words, it is possible to spend twice your monthly salary on this card.

How Do I Get The SalaryCard? 

The digital card can be easily obtained online using the EarlySalary app, within minutes. There are no subscription fees – it’s a free card! 

There are certain eligibility criteria, however, so be sure to check if you are eligible before applying for the card. You:

  1. Should be a resident of India
  2. Should be above 21 years of age, but below 55 
  3. Should be a salaried individual with a minimum of INR 18,000 in urban cities, and INR 15,000 in rural cities.

The entire process takes just a few minutes once you have an approved EarlySalary limit. And, of course, it is safe as users need to answer 2 security questions and have a 6 digit passcode set up in order to use the SalaryCard.

What Can I Spend It On?

The SalaryCard can be used for all indulgences, aspirations, essentials, and basically everything you can think of. So shopping, travel and entertainment, electronics, medicine and insurance, and even for skill upgrades (education and vocational training) – they’re all welcome. Instant loans with zero cost EMIs can be used for purchases on Amazon and Flipkart.

As a user, you will be rewarded after every transaction. This is over and above any Rupay Offers – which can save you Rs 10,000 additionally. All you have to do is shake your phone to see what you have won!

The limits for various categories can be varied, so make sure to check the EarlySalary app to fine-tune it as per your preference. 

Are There Any Prepayment Fees / Cancellation Fees?

No. There are no hidden charges, apart from the convenience fee of INR 199. You can prepay the EMIs and cancel your SalaryCard absolutely free of charge.

How Can I Manage The SalaryCard?

The SalaryCard can be managed with just a few taps from your fingers. Download the EarlySalary app here, and voila, everything you need at your fingertips. 

What are you waiting for? Download the EarlySalary app now, and join EarlySalary’s Credit Suite – celebrate the giant leap we’ve made for the Indian credit ecosystem!

Alternative Data Is Now Mainstream in Credit Risk Analysis

Over the years, an individual’s or even an organization’s creditworthiness has come to be defined by their credit score. A loanee’s traditional data (e.g. credit history, types of credit, credit utilization, etc.) is usually the only factor considered by credit scoring systems to evaluate their creditworthiness. The problem with this system is that a significant part of the population has an insufficient or nonexistent credit history – making them credit-invisible. Indeed, the most common barrier many loanees in India face is the lack of a credit score.

To provide credit access to a wider audience and achieve financial inclusion, loaning institutions must consider a different approach to confirm a loanee’s creditworthiness.  This is where alternative credit data comes in. 

What is Alternative Credit Data?

Alternative credit data, sometimes categorized as big data, is any data that’s not directly related to a client’s credit conduct. Alternative data regarding a client can be obtained from a number of non-traditional data sources- e.g. digital platforms that can provide information on consumer activities for credit risk assessment. Before lending out to a customer, lenders can have credit risk management models leverage alternative data to develop credit scores and ensure their customers’ creditworthiness. 

Alternative data, credit risk analysis

Alternative data for credit scoring can be a combination of the information collected from multiple sources, including a consumer’s utility, rental, insurance, and other bills payments history, social media usage, employment history, travel history, e-commerce, government transactions, and property records.

However, when collecting alternative data for credit risk analysis, it’s important to remember that the gathered data must consist of data points that show the loanee’s habits, preferences, behavior, and character- which is one of the five C’s of credit risk (the others being capacity, condition, capital, and collateral). 

It’s also important to make sure the borrower cannot directly or indirectly manipulate any of the given data. This ensures a thorough evaluation of the potential loanee’s financial abilities and credit risk profile.

How Reliable is Alternative Data When Predicting Credit Risks?

When it comes to using alternative data in credit risk analysis, there’s no specific set of guidelines to follow. Since this approach to credit risk analysis is also fairly new, it’s still in its tentative stages – there’s no extensive historical evidence available to guarantee alternative data’s effectiveness or reliability when it comes to credit risk predictions.  

However, it’s undeniable that even with the traditional way of risk assessment, there’s always going to be risks in the lending business. The alternative data system, keeping up with the digital age, has certainly proven to be more efficient in credit risk analysis, since it focuses on a loanee’s behavior and can bring up data points that the traditional methods might have glossed over. An added benefit of using alternative data in risk appraisal is the increased levels of accuracy, compared to the traditional way of credit scoring.  

In recent years, the general market practices have slowly evolved, with more and more lenders using additional information related to the user along with the traditional credit report to make better lending choices. According to Experian, 65% of lenders in 2019 used some information beyond the traditional credit scores to make lending decisions.

Whether combined with traditional credit scores or not, alternative data provides a detailed picture of a potential loanee’s creditworthiness. It allows creditors to expand their reaches and recognize new, profitable lending opportunities. Plus, with advanced ML implementation (more on that later), alternative metadata can be translated into reliable credit scores.

Where to Get Alternative Credit Data?

A wide range of non-traditional data can attest to a loanee’s creditworthiness – the sources and sorts of data used in the credit risk analysis depend entirely upon the creditor organization. 

As per this research conducted by the management consulting firm Oliver Wyman, a meticulous alternative credit data source should have these features:

  1. Coverage: A data source will ideally have broad and consistent coverage (for instance, the mobile phone market is more concentrated than most others, so data collection is easier there).
  2. Specificity: The data source should contain detailed information about the individual/organization applying for a loan. (e.g., timely/late payments over a particular time period, income data, etc.).
  3. Accuracy and Timeliness: The data considered must be accurate and updated frequently.
  4. Predictive Power:  The information should be relevant to the specific consumer behavior being assessed.
  5. Orthogonality: Ideally, the data source would complement traditional bureau data, so that its use would improve the accuracy of traditional credit score.
  6. Regulatory compliance: Alternative credit data sources must abide by existing regulations for consumer credit.

A few types of alternative data frequently used in credit risk analysis are:

  1. Phone, Rent, and Utility bills: Since all of these payments have to be made periodically, they are some of the most trustworthy sources for alternative data collection. Periodic payments provide frequently updated insight into a  consumer’s financial behavior. 
  2. Social Media Accounts: A consumer’s social media pages (for example, LinkedIn, Facebook, Instagram, and Twitter) can bring forth a lot of information including their employment status, lifestyle, and spending habits, etc. However, the data displayed on social media can be inaccurate and is also directly influenced by the consumer; therefore, the credibility of alternative data procured through social media can be diluted.  

ML Adoption in Extracting and Processing Alternative Data:

When it comes to processing the gathered alternative credit data, manually going through a loanee’s information would be incredibly taxing, not to mention the quite high chances of human errors or oversight. Therefore, it’d be in the best interests of lending corporations to look into advanced technologies such as machine learning and AI (artificial intelligence) that can take over the process on their behalf. 

ML, or machine learning, comes with superlative analytical frameworks that could help in evaluating data accurately and recognizing the key patterns in customer behavior under different circumstances. The convergence of different ML techniques with alternative data could prove revolutionary in credit risk analysis. Some of the advantages that ML can provide are:

  • Rooting out only the useful information out of sizable data sets
  • Lowering data processing time
  • Giving a full rundown of a customer’s creditworthiness based on the collected data 
  • Recognizing key patterns in consumer behavior under different circumstances
  • Predicting a loanee’s ability to repay the loan in time

Interested in learning more about the whys and hows of integrating machine learning into credit risk analysis? We’re happy to share our thoughts on the convergence of machine learning and big data in credit risk management.

With the number of people looking to get loans for varying purposes, increasing with every passing day, the credit industry needs to realize the significance and benefits of financial inclusion. After all, only a small percentage of people in Asia have a formal credit history; to work towards closing the lending gap that still exists, companies need to look into other ways to evaluate a person’s creditworthiness. It’s realities like these that led to EarlySalary and all its innovations in the credit space, enabling us to achieve 1 million loan disbursals.

As the usage of smartphones grows and the financial systems worldwide gradually become internet-based, tracing a person’s digital footprints has become a lot easier. Besides, collecting alternative data has inarguably gotten simpler than accumulating traditional credit data. 

Keeping pace with the advancements in individual technologies, the introduction of an alternative data-based credit risk management system in loaning organizations only seems reasonable. Taken into account, the sheer amount of still unrealized possibilities that ML incorporation into credit risk analysis brings, the future of credit risk management sure looks bright. 

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:
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Download the EarlySalary app here, or simply log in to our website and be a part of the #OneSmallStep experience.

EarlySalary Just Turned 5. #OneSmallStep for us, one giant leap for the Indian Credit Ecosystem

Since its inception five years ago, EarlySalary has enabled rapid, simplified credit access to millions of young working professionals. Be it assisting someone adjusting to a new town or helping them upgrade their skills. As Mr. Akshay Mehrotra, CEO and Co-Founder at EarlySalary puts it, “over the past 5 years, we have built one of the largest consumer lending FinTech Company of India and have disbursed over 1.7 Million loans, have built a fully automated & ML based decisions system which allow thousands of loans to be disbursed each day.”

The journey so far has been an exhilarating one. Acceptance by customers has been another challenge, but with time, we have been able to establish ourselves in the Indian credit ecosystem. We’d like to walk you through our fascinating journey.

Five Years of EarlySalary 

A primary goal at EarlySalary has been to provide an amazing borrowing experience for the salaried class. With offerings such as the SalaryCard and low-cost EMI options for shopping, the attempt has been to allow consumers to spend unrestricted, unhindered. Even when their credit scores may not permit traditional credit access. Simultaneously, importance also had to be placed on the convenience of the process. With a secure, entirely digital application procedure and 24*7 availability, the convenience of the customer while seeking instant loans has always been a top priority.

EarlySalary Credit Suite

In these five years, the pillars of the business that have got EarlySalary where it is today include the following.

  • Customer Partnerships – Over the years, EarlySalary has been part of some great partnerships. The employer tie-up program allows employers to partner with us and be part of the financial wellness program. We also provide loans for consumers to be able to spend on Amazon, Flipkart, or Makemytrip.
  • Data – EarlySalary has kept its pace with the data revolution, and it’s this data that has helped to extend a seamless experience to the customers.
  • A Stellar Tech Team – For a company providing a fully digital experience, technology has been the backbone of EarlySalary’s success. From the latest app updates to a secure payment process, technology will continue to remain a central aspect of this journey.
  • Exciting Products – EarlySalary products include instant cash loan, SalaryCard, personal loan, free credit score, and salary advance. The aim is to continue working on the optimization of these products.
  • Lending Partners– Our new and existing lenders have also played a crucial role in our success.

The Indian Credit Ecosystem Needs a Giant Leap

Despite our successes in the sector and the strides we’re proud of, getting access to short-term credit can often be extremely difficult for many in the country. A low credit score is often synonymous with rejected loan applications and the consequential, cascading effect on an individual’s life, such as the opportunity costs in upskilling oneself, or even difficulties in renting the right house. 

EarlySalary Credit Suite

The loan process itself remains wedded to the past. While at EarlySalary we’ve been entirely digital for as long as we can remember, credit access in India should ideally be as simple as swiping a card, shouldn’t it? 

These challenges are compounded further during times of an economic crisis. Such a scenario necessitates the presence of trusted creditors that can provide easy access to short-term credit.

The global pandemic brought life to a halt, and overcoming it has been an independent challenge in itself. With Reboot 2020, EarlySalary has helped customers have a fresh start. And as local economies resume and open up, customers are once again returning to a credit system that’s quite frankly, in need of an overhaul.

And that’s exactly what we’re here to deliver as we enter our sixth year. In the words of Ashish Goyal, Co-Founder and CFO of EarlySalary, “ the saying goes – ’Never let the good crisis go to waste’ and we did exactly that. In the last 6 months during the pandemic & lockdown period, we had invested our time in building new customer relationships, new products, and new opportunities at EarlySalary.”

We’re Starting with #OneSmallStep – The EarlySalary Credit Suite

EarlySalary Credit Suite

This month, we’re marking our five-year celebrations with a special campaign aptly titled #OneSmallStep. And on that note, we’re bringing you the EarlySalary Credit Suite. The Credit Suite represents our product array of free credit score checks, short-term loans, personal loans, SalaryCard, and the option to check out and pay later. Here’s a quick list of the features we’re packing in this giant leap:

  • Short term, Instant loans with ₹8000 to ₹5 lakhs limit
  • Long Term Personal Loans with the 12-months to 36-months EMI options
  • Free credit score facility for a detailed snapshot of your credit financial position 
  • All-new digital EarlySalary Card with customized credit solutions customized features
  • Buy on EMI functionality so you can ‘Pay Later’ during checkouts.

And the best part about this is that the entire credit suite is only a tap away – no formalities and completely digital. All on your smartphone!

EarlySalary Credit suite

While the EarlySalary Credit Suite is only a small step amongst many others that we have taken over these five years, it reflects a big leap for the Indian credit ecosystem as a lifestyle finance tool. With it, customers will be able to manage their life’s experiences with the utmost convenience. 

Thank you, India!

Over the years, massive efforts have gone into making this journey possible. All the lines of code written, every customer helped out, and every new product launched, has led us to where we are now. For the people who never hold back from their aspirations, who love going places, and who want to fulfill their ambitions by upskilling themselves, EarlySalary has been a blessing. We shall continue to improve, innovate, and remain committed to excellence.

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:
Our Facebook Page
Our Twitter Page
Our Instagram Page
Our LinkedIn Page
Download the EarlySalary app here, or simply log in to our website and be a part of the #OneSmallStep experience.

The RBI Moratorium Saga In 2020: All You Need To Know

The coronavirus pandemic hit economies worldwide, and regulatory authorities like the Reserve Bank of India recognized the hardships that borrowers might be facing in repayment of loans in times of such uncertainty. Hence, as a relief measure, the RBI introduced EMI moratoriums on all term loans in March 2020. This was for a duration of three months, that is, till 31st May 2020. However, this moratorium was further extended for three additional months, stretching is to 31st August 2020. This move by the RBI was intended to provide borrowers with some relief amid the Covid-19 pandemic. In October 2020, the Supreme Court got involved, and the matter underwent fairly new interpretations and changes, with many asking what really the RBI moratorium meant for borrowers.

Here’s all you need to know: 

About the moratorium on loan EMIs

In March 2020, the RBI offered a loan moratorium of three months initially, till 31st May 2020, to help borrowers tide over the financial struggles they faced due to the coronavirus pandemic. This was valid on equated monthly installments (EMIs) and was further extended to 31st August 2020. This moratorium was valid for all loans, which included education loans, home loans, personal loans, and credit card dues. 

During this moratorium period, borrowers were not required to pay the standard EMIs on their loans. This measure was aimed at giving borrowers more time to clear payments of EMIs without being classified as non-performing assets (NPAs), amid the grave economic repercussions of the lockdown. 

Eligibility criteria

The circular released by the Reserve Bank of India, dated 27th March 2020, declared that all individual borrowers were eligible to apply for the loan moratorium. This was valid for EMIs whose loans were outstanding as of 1st March 2020. 

How does it work?

The entire process was aimed towards providing borrowers with relief amid the adverse financial implications of the pandemic. Anyone who had opted for this moratorium was not required to pay EMIs during the said period. However, the interest was not waived off and would continue to accrue on the outstanding amount. 

This meant that borrowers had to pay additional interest on months covered in the moratorium on EMIs either by increasing the installment amount or by increasing the tenure of the loan. The RBI, however, assured borrowers in its circular that opting for the same would not negatively impact their credit scores or lead to credit downgrading. 

What does it mean for lenders?

Lenders such as commercial banks, including rural banks, local area banks, and small finance banks, NBFCs, all-India banks, and co-operative banks were permitted to allow the moratorium on EMI loans. In its annual report, the central bank reported that a moratorium on loan repayments would have an impact on the financial health of banks. This was after the SC issued a statement in support of borrowers, which said that ‘there is no merit charging interest on interest’. 

On June 4, 2020, the RBI said that lenders might lose up to Rs. 2 lakh crore if interest was waived off for the moratorium period. To tackle this problem, on 2nd October 2020, the central government told the SC that it would waive off compound interest on loan repayments of up to Rs. 2 crores, a move that was aimed at providing relief to MSME and individual borrowers. 

On 5th October 2020, the apex court granted the government and the RBI to file additional affidavits, the hearing was scheduled for the next day.

The hearing on 14th October 2020 concluded with RBI clarifying that only standard loan accounts as of 1st March 2020 could be recast under the moratorium. This means that: 

  • If a loan account that was due for over 30 days as of 1st March 2020 but got regularised, it would not be eligible or valid for the Covid-19 resolution framework. 
  • Hence, the restructuring framework is only applicable to eligible borrowers who were categorized as standard as of 1st March 2020. 
  • The Reserve Bank of India also agreed to waive off the ‘interest on interest’ or compound interest. This was to be charged on loans of up to INR 2 crore for the 6 month moratorium period announced at the beginning of the coronavirus wave. 
  • Moreover, the apex court also asked the government to implement this decision of waiving off the compound interest without delay and has asked the Centre to return with an appropriate action plan on 2nd November 2020. The government has addressed SC’s concern of possible implementation delays and given an outer limit extending to 15th November 2020 for the same. 

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