Page 32 - Banking Finance March 2023

ARTICLE

DIGITAL

LENDING - A

WAY

FORWARD

Abstract Digital Lending in India
Digital lending is the process of availing credit online. Its In India, unmet credit demand of younger cohorts, low
increased popularity amongst new-age lenders can be financial inclusion, technological advancements and
attributed to expanding smart phone penetration, credit increasing internet penetration are going to be the strong
range flexibility, and speedy online transactions. In the drivers. However, trust in technology, data security and
last few years, India has seen a massive disruption in the customer protection considerations will play a critical role
fin-tech space that has brought flexibility and the in determining the extent of Fin-Tech adoption.
versatile digital customer experience in banking and
lending. Additionally, the outbreak of COVID-19 has India's vision towards becoming a cash-light economy
created a huge space for consumers and business combined with the growth of public digital infrastructure and
enterprises to heighten the lending market growth. the demand for financial inclusiveness makes it a front
Digital lending has a larger opportunity in India and the runner in the digital lending technology arena. Data analysis
total retail loan which could be distributed digitally till indicates that digital lending is set to account for 60% of
2023 would be over $1 trillion. According to research work the total Indian fintech market by 2030 (Mukesh Chand.
of Boston Consulting Group on consumer behaviour 2022).
across purchase journey, 50% of loan seekers with
internet access buy their loans online. India's digital lending market has grown quickly and
facilitated $2.2 billion in digital loans in 2021-22. The digital
lending market size is set to grow from USD 270 billion in
About the author 2022 at a CAGR of 22% between 2022 and 2030 ( Inc42
Report, 2022).
J. Rajesh Kumar
Chief Manager (Faculty)
Digital ecosystem
Bank of Baroda
Baroda Academy, Chennai
Along with customers' behaviour, it is very essential to have

28 | 2023 | MARCH | BANKING FINANCE