Business
From Phygital Models To AI Scores: The Future Of Home Lending In Tier 2 & 3 Cities
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Atul Monga of BASIC Home Loan highlights how fintech, local agents, and partnerships are making home loans more accessible in Bharat’s smaller towns.
In smaller towns, one of the main challenges is that a lot of people don’t have formal income proof or a credit history.
Home loan accessibility in India has long been a challenge, especially beyond metro cities. While urban borrowers often have easier access to credit thanks to formal incomes and established credit histories, millions in Tier 2 and Tier 3 cities continue to face hurdles ranging from lack of awareness to documentation gaps. With the rise of fintechs, local partnerships, and technology-driven solutions, the landscape is gradually shifting.
In this interaction, Atul Monga – CEO & Co-Founder, BASIC Home Loan, shares insights on the biggest challenges, innovations, and the road ahead for making homeownership more inclusive across Bharat.
1- What are some of the biggest challenges in making home loans accessible in smaller towns and cities?
In smaller towns, one of the main challenges is that a lot of people don’t have formal income proof or a credit history. Additionally, financial literacy tends to be lower, which can confuse the loan process. Lack of awareness about loan eligibility, benefits, and the application process often leads to consumer inertia, and many borrowers simply don’t take the first step. Additionally, things like inconsistent documentation, limited lending options, and the need for physical verification of the property further create more friction.
Today, banks and fintech companies are attempting to address this scenario in various ways. The solution lies in a phygital approach, which brings together digital tools and a strong network of local agents. These agents work directly with customers, guiding them step-by-step, building trust, and making sure even those with limited financial paperwork can navigate the process smoothly.
2- What are some of the challenges that people and lenders face when it comes to Last Mile Connect?
Last Mile Connect in home lending can be quite challenging, especially in smaller towns. The digital infrastructure is still developing in many areas, which means things like poor internet access, patchy documentation, and low financial awareness can make it hard for lenders to accurately assess a borrower’s profile or risk level.
Many borrowers feel unsure about navigating the process online without any personal guidance. There’s also a fear of fraud, and the cumbersome paperwork involved can feel overwhelming. Without someone local to assist, even well-intentioned or eligible borrowers often drop off halfway through.
The good news is that things are gradually improving now, thanks to steady advancements in fintech and digital infrastructure that are making loans more inclusive and accessible than ever before.
3- How are fintechs helping people with informal incomes or no credit history get access to home loans?
Fintechs have made home loans more accessible for people without formal incomes or credit history. Traditionally, lenders relied heavily on salary slips and credit scores to determine the borrower’s creditworthiness, but this leaves out a major chunk of the population, especially from the informal sector.
Now, with the help of technology, we are able to look beyond such traditional indicators. By using alternative data like bank transaction patterns, utility bill payments, and digital footprints, we can create a reliable credit tracking system for people who don’t fit the conventional mold.
4- What are the common concerns or roadblocks that first-time homebuyers in unreserved areas usually face?
First-time homebuyers in unreserved or semi-urban areas often struggle with unclear or incomplete property titles, which can create legal complications and make it difficult to get a loan approved. Many of these areas also lack RERA-approved projects, which adds another layer of risk for both buyers and lenders.
There’s often limited awareness about how home loans work, what’s required, how interest rates are structured, or what documents are needed. Another common hurdle is that property values in these regions tend to be modest, but lenders may still have high minimum loan amounts, making it harder for buyers to qualify.
Lenders, Fintechs like BASIC Home Loan, and local real estate developers are working together to bridge the gap and create more accessible loan products, streamline documentation, and guide homebuyers through the process. This collective effort would certainly help unlock home ownership for a segment that has long been underserved.
5- Why is local presence important like field agents or developer tie-ups, important in driving home loan adoption beyond metro areas?
Local presence plays an important role when it comes to building trust, especially in the heartland of Bharat, where digital-only models still feel distant or unfamiliar. For many first-time borrowers, human interaction still matters, and this is where the field agents come in. They don’t just help with the paperwork, but also build confidence, address consumer concerns and guide them through every step of the journey.
Developer tie-ups are equally important. When we work with trusted local builders, we can ensure that the properties are already verified and pre-approved for financing, which significantly reduces the loan process. Which is why we have partnered with real estate developers to offer curated property options and faster loan turnarounds to customers.
6- How are strategic partnerships between lenders, fintech platforms, and HFCs unlocking housing loan access in India’s Tier 2 and Tier 3 cities?
Strategic partnerships are at the heart of expanding home loan access, especially in India’s smaller cities. By working together, fintechs, lenders, and HFCs will be able to bring speed, flexibility, and trust to markets that have long been underserved, thereby making home ownership a more realistic goal for millions across Bharat.
7- What are some innovations or changes you see coming that could make home buying easier and more inclusive across India?
Homebuying in India is witnessing crucial transformations, especially outside the metros. Digitised property records, e-KYC, and geo-tagging of properties are already beginning to ease long-standing verification bottlenecks.
AI-led credit scores will further open doors for borrowers with informal incomes or limited credit backgrounds. Embedded finance options, where home loans are integrated directly into real estate platforms, can further make the process seamless for borrowers.
The future of home ownership in India will be shaped by a combination of hyperlocal support and smart, scalable technology. It’s about bringing the same ease of access and trust that metros enjoy to Tier 2, Tier 3 cities, and eventually to every corner of Bharat.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
August 31, 2025, 16:38 IST
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Business
Indias Forex Reserves Rise $3.5 Billion To $694.2 Billion In Latest Week, Supported By Foreign Currency Assets, Gold
New Delhi: India’s foreign exchange reserves rose by USD 3.5 billion in the week that ended August 29 to USD 694.230 billion, driven largely by a rise in foreign currency assets and gold, the Reserve Bank of India (RBI) said in its latest ‘Weekly Statistical Supplement’.
The country’s forex kitty is hovering close to its all-time high of USD 704.89 billion touched in September 2024. For the reported week, India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at USD 583.937 billion, a rise of USD 1.7 billion.
The RBI data showed that the gold reserves currently amount to USD 86.769 billion, witnessing a rise of USD 1.8 billion. After the latest monetary policy review meeting, RBI Governor Sanjay Malhotra said the foreign exchange kitty was sufficient to meet 11 months of the country’s imports.
In 2023, India added around USD 58 billion to its foreign exchange reserves, contrasting with a cumulative decline of USD 71 billion in 2022. In 2024, the reserves rose by a little over USD 20 billion. So far in 2025, the forex kitty has cumulatively increased by about USD 53 billion, according to data.
Foreign exchange reserves, or FX reserves, are assets held by a nation’s central bank or monetary authority, primarily in reserve currencies such as the US Dollar, with smaller portions in the Euro, Japanese Yen, and Pound Sterling.
The RBI often intervenes by managing liquidity, including selling dollars, to prevent steep depreciation of the rupee. The RBI strategically buys dollars when the Rupee is strong and sells when it weakens.
Tata Motors Vehicles Price In India: Tata Motors on Sunday announced that it will pass on the entire benefit of the recent GST rate cut to its commercial vehicle customers. The new prices will be effective from September 22, the day the revised GST rates come into force.
“Tata Motors will pass on the full benefit of the recent GST reduction on its entire commercial vehicle range to customers, effective September 22, the date the revised GST rates come into effect,” the company said in a statement.
The price cuts will vary across different vehicle categories. Heavy commercial vehicles (HCVs) will see a reduction ranging between Rs 2.8 lakh and Rs 4.65 lakh. Intermediate, light, and medium commercial vehicles (ILMCVs) will become cheaper by Rs 1 lakh to Rs 3 lakh.
Buses and vans will see reductions between Rs 1.2 lakh and Rs 4.35 lakh. Small commercial passenger vehicles (SCVs) will get price cuts between Rs 52,000 and Rs 66,000, while SCVs and pickups will become cheaper by Rs 30,000 to Rs 1.1 lakh. The company said the GST on commercial vehicles has been reduced to 18 per cent, a move that it believes will help revive India’s transport and logistics sector.
Girish Wagh, Executive Director of Tata Motors, said the decision reflects the government’s commitment to strengthening the country’s economic backbone. He added that Tata Motors is proud to extend the full GST benefit to customers, ensuring lower costs and better access to modern vehicles.
Tata Motors highlighted that commercial vehicles play a crucial role in India’s growth by driving logistics, trade, and connectivity. With the GST reduction, the company expects the total cost of ownership for transporters, fleet operators, and small businesses to come down.
This will encourage faster fleet modernisation and wider adoption of advanced, cleaner mobility solutions, helping operators cut costs, improve efficiency, and boost profits. The company has also encouraged customers to book vehicles early to take advantage of the reduced prices during the upcoming festive season.
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