In an era marked by technological advancements and the digitisation of financial services, digital loans have emerged as a transformative force in the lending landscape. According to Fintech Association for Consumer Empowerment (FACE), in its 8th edition of FACETS report, digital loan disbursement volumes and value recorded an annual growth rate of 39 percent and 43 percent, respectively.
The report has data from 37 FACE member companies lending to customers through their NBFC and in partnership with other regulated entities (mostly NBFCs). Of 37 companies who contributed with their data, 28 are NBFCs/have in-house NBFCs.
“On an aggregated basis, during Q2 FY 23-24, member companies reported disbursing nearly 2.44 Cr loans, a YoY increase of 39% from Q2 FY 22-23 and 10% over the previous quarter (Q1 FY 23-24). Growth rates vary significantly across companies, attributed to multiple factors, including scale, segment focus, and access to capital. Overall, two-thirds of the companies reported positive growth in disbursement volumes,” the report stated.
It further informed that on an aggregated basis, during Q2 FY 23-24, member companies reported disbursing Rs 31,692 Cr, a YoY increase of 43% over Q2 FY 22-23 and a quarterly increase of 15% over Q1 FY 23-24. There is variation across companies regarding growth rate. More than three-fourths reported YoY growth over the comparable quarter of FY 22-23.
Here are some of the key insights from the report:
- FACE member companies disbursed 2.44 crore loans during Q2 FY 23-24, an increase of 39% compared to Q2 FY 22-23 and a 10% increase over the previous quarter.
- Disbursement value increased by 43% in Q2 FY 23-24 from Q2 FY 22-23 to reach Rs. 31,692 crore compared to Rs. 27,673 crore last year. More than three-fourths of the companies reported a positive annual growth over the comparable quarter in FY 22-23.
- The total Asset Under Management (AUM) of fintech lending companies was Rs. 36,169 crore, with 69% as an on-balance sheet. For companies who are NBFC/own NBFC, 79% of the AUM is on their own balance sheet.
- Data on Customer redressal shows 97% of all customer grievances being resolved within 7 days and 41% within a single day.
- Over 25% of complaints were related to credit bureau updates and disputes, followed by app-related grievances (15%) and disclosures (11%).
Notably, digital loans, also known as online loans or e-loans, have revolutionised the borrowing experience, making financial services more inclusive and efficient. As the fintech ecosystem continues to evolve, digital lending is poised to play a pivotal role in shaping the future of finance.