Business Talk Magazine

The pandemic has skyrocketed digital transformation across financial services and products. As per that, customers are getting more accustomed to digital platforms, while on the other side, service providers such as banks, NBFCs and fintech platforms are also rapidly changing.

Siddharth Mehta, Freecharge’s CEO, states, “With the advancement of digitization and formalization, digital lending in India has witnessed a constant rise and, if regulated properly, it will scale up soon. While 2021 started slow, it eventually picked up with different digital lending start-ups and NBFCs paving the way, catering to new to bank, new to credit and the under-served population, thus resulting in overflow of unsecured lending.”

Industry experts state that Indian consumer behavior has also undergone a monumental shift over the past decade. As a result, the middle class is becoming aspirational and looking at ways to help them acquire products and experiences. Hence, the BNPL offering comes into play, enabling bridging the gap between Aspiration and Affordability.

Mehta further adds, “In 2022, the ‘Buy Now Pay Later’ offering, which is serving as a key to credit, will witness huge adoption, that involves uptake in the EMI product category. Digital lending has the possibility to become the new normal and lead for a massive growth opportunity for the Indian eCommerce sector as well.” Consumer enthusiasm will propel this space and add value to the digital consumer consumption narrative.

Digital lending, experts consider, will surely increase in the next few years, with loans to small and micro enterprises seeing a huge increase. “The important factors for the growth of lending and banking services to the SME sector will be more promising cooperation amongst banks/NBFCs and fintech and digital adoption by SMEs. The partnership between banks/NBFCs and Fintechs will further allow these segments loans starting from as low as Rs 1000 entirely digitally along with the ability to also collect them digitally and seamlessly,” says Mehta.

He further adds, “Additionally, these partnerships will allow them to build alternate data-based underwriting for these segments hoping that structured data for most of these segments are not easily available.”