Digital Lending Sectors in India||Advantages of Digital lending||Challenges and Opportunities with the sector
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India's digital Lending ecosystem has experienced tremendous growth over the last few years. For the massive demographic opportunities, the country's fintech platforms is a product of regulatory initiatives, quick funding environment and growing venture capitalist interest.
Digital Lending is a remote and automated borrowing lending process.It is largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and hassle free associated customer service.
Digital lending is a major area of the fintech zone in India. The Reserve Bank of India has determined digital lending as a remote and automated lending process, basically using seamless digital technology in customer accession, distribution, collection and customer support service.
After all the requisition for loans has increased in India, there has been a rise in many digital lending platforms such as NBFCs, micro fintects, peer to peer and similar institution due to the hesitation of traditional institutions to lend money to low-income credit disadvantaged place.
New-age lenders
In India,Digital lending platforms doesn't lend only to MSMEs but also to retail customers. Their lending services range from small personal and pocket money loan for buying a new TV, to buy-now-pay-later loans and educational loans, cars, and also small housing loans.
In these service,customers becomes comfortable and easy to access credit through their mobile devices. It also gives less paperwork and fewer eligibility checks than bank branch offices. The COVID-19 pandemic has further escalated the use of digital lending services in India.
The success of digital loan provider companies such as Lendingkart, Incred, MobiKwik Kreditbee,and Zestmoney business growth in the sector. Millennials, Flipkart, Amazon,and Gen Z are also increasingly embracing the concept of micro credit and buy now pay later services.
Key benefits of Digital Lending
- Easier loan Disbursement:Digital Lending platforms uses for the lending process minimize geographical barriers, allowing borrowers to take products(loan)applications faster. It comes with easy data entry, personalized customers experience, and smooth loan application procedure.
- Easy to capture applicants details
- Guarantees quick decision making
- Increases efficiency
- Better lending consistency
- Better customer experience
- Inclusivity and Accessibility
- Speed and Convenience
- Reduce operational cost
- Cost efficiency
- Transparent
- Improved customer experience
- Enhanced date utilization
- Paperless process
- Scalability
- Competive market
More advantages
- Efficient Risk assessment
- Leveraging technology
- Boast to the Indian economy
- Flexibility
The challenges of Digital Lending
- Data Privacy and security
- Regulatory framework
- Risk management
- Financial literacy
- Digital divide
- Operation challenges
- Economic and markets Risk
- Competition
- Customer trust and adobtion
- Technological dependence
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