Fintech Lending Skyrockets as India Trusts in Digital Loan Solutions

In a recent report by the Fintech Association for Consumer Empowerment (FACE), it was highlighted that digital loan disbursement volumes in India have seen an annual growth of 39%. Similarly, there was also a 43% increase in value, indicating a robust expansion in the online lending sector. These numbers were boosted by FACE member companies disbursing 2.44 crore loans in the second quarter, marking a 39% year-on-year increase.

Key points:

  • FACE member companies disbursed over 4.67 crore loans in the first half of the current financial year.
  • The value of loan disbursements for the quarter ending September 2023 reached Rs 31,692 crore, a 43% increase from the corresponding quarter the previous year.
  • Over 75% of the companies reported positive annual growth over last year.
  • Digital lending platforms are increasingly important for catering to the credit needs of various unmet market segments in India.
  • The total assets under management (AUM) of fintech lending companies stood at Rs 36,169 crore, with 69% as on-balance sheet assets.
  • For non-banking financial companies (NBFCs) or companies owning NBFCs, 79% of the AUM was on their balance sheet.
  • 97% of all customer grievances were resolved within seven days, with 41% resolved within a single day.
  • The primary cause for customer complaints was related to credit bureau updates and disputes (25%) followed by app-related issues (15%) and disclosures (11%).

Sugandh Saxena CEO of FACE commented on the findings, conveying that the data emphasizes digital lenders’ commitment to integrating vast unaddressed segments into formal credit systems. Saxena also stressed on the role of regulatory frameworks in fostering the industry’s growth and maturity alongside ongoing investments in customer protection, underwriting models, and portfolio quality.

Undoubtedly, these statistics along with the noted surge in disbursement volumes and value signal a strong consumer confidence in digital lending platforms in India. In conclusion, the continued growth and advancement of digital lending platforms are set to play a critical role in addressing the credit needs of the underserved market segments in the country.