The online lending sector in India is witnessing a significant upswing, as highlighted in a recent report by the Fintech Association for Consumer Empowerment (FACE).
The report details a notable annual growth of 39% in digital loan disbursement volumes and a 43% increase in value, underscoring a robust expansion in the sector.
FACE member companies, in the second quarter, disbursed a staggering 2.44 crore loans, marking a 39% year-on-year increase and a 10% rise from the previous quarter. The first half of the current financial year saw these companies disburse over 4.67 crore loans, amounting to Rs 59,365 crore, representing a 29% growth compared to the last half-year.
The value of loan disbursements for the quarter ending September 2023 reached Rs 31,692 crore, up 43% from Rs 27,673 crore in the corresponding quarter the previous year. More than three-quarters of the companies reported positive annual growth over last year.
Digital lending is increasingly vital in catering to the credit needs of various unmet market segments in India. The surge in disbursement volumes and value signals strong consumer confidence in digital lending platforms. The FACE report analyzed disbursement data from 37 member companies.
Sugandh Saxena, CEO of FACE, commented on the findings:
The data reflects digital lenders’ unwavering commitment to integrating vast unaddressed segments into formal credit systems, offering superior experience, choice, and convenience.
Saxena further highlighted the role of regulatory frameworks in nurturing the industry’s growth and maturity, emphasizing ongoing investments in customer protection, underwriting models, and portfolio quality.
The report also noted that 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.
In terms of customer service, the report revealed impressive figures: 97% of all customer grievances were resolved within seven days, and 41% within a single day. The primary cause for customer complaints was related to credit bureau updates and disputes, accounting for over 25% of all grievances, followed by app-related issues (15%) and disclosures (11%).
