The fintech revolution in India is expected to spur digital lending and is likely to surpass traditional avenues of lending by 2030, revealed the latest Experian report titled ‘Fintech-led Digital Lending: Coming of Age.’ According to Experian India's report, this growth will be driven by the unsecured small-ticket size segment and the secured collateral-based high-ticket size market.
Experian’s report was made in collaboration with the Digital Lending Association of India (DLAI).
Saikrishnan Srinivasan, Managing Director, Experian Credit Information Company of India, while commenting on the key findings, said, “Traditional lenders have always dominated asset-backed lending. With increased digitisation, this segment may become accessible to fintech lenders, allowing them to capture a sizeable portion of the lending pie.”
The report highlighted that the domestic credit market, which has undergone significant changes over the last few years, is likely to accelerate further. It added that the next 100 million customers are likely to have a vastly different profile and expectations than those currently in place.
As co-lending becomes the predominant operating model in India, more traditional lenders will collaborate with fintechs to reach a higher degree of maturity and amalgamation of core competencies, it said.
For MSME borrowers seeking business loans, those with credit scores higher than 700 are catered to more by fintechs than by other lenders, paving the way for the co-lending model to flourish, it showed.
The research also suggested that the fintech sector’s pivotal players of the future will be the ones able to harness the power of analytics and technology to provide a superior experience in an embedded manner.
As per the report, open data will become wider in scope, creating a level playing field for fintechs with traditional lenders. It added that fintechs are likely to become systemically important, but will face high regulatory supervision and will have to invest significantly higher in cybersecurity and compliance.
Fintechs will also need to focus on funnel optimisation for sustainable growth. In this respect, portfolio monitoring and cross-selling will assume a lot of importance, added the report.
(Edited by : Vivek Dubey)
