As the industry of Fintech grows, more and more people and companies are utilizing a form of loans called micro-loans. Although micro-loans are still in its formative stages and there are many interpretations to what a micro-loan is, it is generally a small loan ranging between $500-$100,000. Historically they have not been very profitable, but fintech has changed the way these loans work. Fintech has made it possible for people to apply for a loan and instantly get cash. An app called Kabbage provides this service to small businesses who can get up to $100,000 in as little as seven minutes with the click of a button.
This has changed not only the way micro-loans are used, but it has changed the way small businesses approach loans. Traditionally, small businesses would have to put up collateral with a bank to receive any sort of loan, but fintech has given small businesses access to borrowed cash much quicker. Not only does it expedite the loan acquisition process for small businesses, but interest rates are often much lower than that of a bank. Fintech and micro-loans has made it a much easier process for small business to apply for a loan.
Reference: http://www.techbullion.com/micro-loans-fintech-influencing-loan-industry/