Factors that led to digital lending boom in India
India Today
According to media reports, the digital lending market is projected to grow from USD 100 billion in 2019 to well over USD 350 billion in 2023. Also, India had the highest FinTech adoption rate of 87 per cent as of 2020.
The FinTech ecosystem has skyrocketed in popularity in recent years, especially after the outbreak of the pandemic. The banking, financial services, and insurance (BFSI) sector, particularly, soared with digital lending services transforming loan process and disbursement methods.
As the term implies, digital lending is the new-age practise of applying for and giving out loan or credit to borrowers by financial services through the completely online or digital platform journey. The growing popularity can be ascribed to factors such as growing smartphone usage, internet penetration, credit range flexibility, and the convenience and efficiency that digital brings.
GROWTH OF DIGITAL MARKET
According to media reports, the digital lending market is projected to grow from USD 100 billion in 2019 to well over USD 350 billion in 2023. Also, India had the highest FinTech adoption rate of 87 per cent as of 2020.
Digital lending has emerged as an effective alternative to traditional lending (by financial institutions) for people who are new to credit or are underserved by the financial system.
ENABLING FINANCIAL INCLUSION
With the Internet reaching India’s remotest areas, now is the opportunity for people across geographies and demographics to access financial services digitally. Innovative products offered by fintech companies (lending apps in particular) have overcome traditional limitations, reduced transaction costs and are enhancing customer experience.
