Sri Lanka has seen an exponential increase in the use of online loan applications across the country, according to a report by online lender Robocash said.
The user base for these digital lending services has seen a dramatic rise, skyrocketing from 10,600 in August 2021 to a staggering 1.3 million by November 2023.
This marks a 125-fold increase in a little over two years, reflecting an average monthly growth rate of 19.5 percent, the report added. This trend underscores the rapid and consistent growth of digital lending in Sri Lanka, attracting a broad spectrum of users.
Robocash attributes this surge to the convenience and efficiency of digital lending applications, which have redefined the landscape of financial services.
These applications not only offer rapid approval times and innovative features like immediate fund disbursement post-application but also prioritize security. Many utilize advanced fraud detection technologies, analyzing over 1,000 data points to mitigate risks effectively.
The digital lending industry is also introducing novel solutions, such as income diversification options, reshaping how lending services are offered and accessed.
The growing popularity of these digital platforms is largely due to their accessibility and inclusivity, making financial services more readily available to a wider range of users.
These platforms empower users by providing immediate access to crucial financial information, including interest rates and terms, enabling swift and informed decision-making.
This has significantly widened the scope of financial solutions, particularly benefiting segments of the population that were previously underserved, such as small farmers, women entrepreneurs, and rural households.
In reaction to this rapid growth and to bridge regulatory gaps, the Central Bank of Sri Lanka is planning to establish a Credit Regulatory Authority. This authority aims to enhance supervision over credit firms, including digital lenders, thereby improving overall industry practices.
Konstantin Bereutsyn, Robocash’s Country Manager for Sri Lanka, commented on the findings:
The remarkable increase in digital lending users reflects a heightened trust in these platforms as a means of providing formal credit to those who traditionally lack access to such services.
He also echoed the Digital Alternative Lending Association (DALA)’s reminder, emphasizing the importance for customers to engage only with legitimate financial institutions to ensure secure and ethical transactions.