23 September 2023

Digital Technology Guru

Digital Technology Guru Reviews

The Digital Lending Space Shows Strong Growth in Q1 FY24

2 min read
The Digital Lending Space Shows Strong Growth in Q1 FY24

The digital lending industry in India has experienced significant growth in the first quarter of the financial year 2024 (Q1 FY24), according to a report the Fintech Association for Consumer Empowerment (FACE). The report reveals that digital lenders registered a year-on-year increase of 31 percent in loan volumes and a 32 percent rise in loan value during this period.

During Q1 FY24, member companies of FACE disbursed a total of 2.2 crore loans, representing a 16 percent increase compared to the previous quarter. Moreover, the total value of disbursements amounted to ₹29,875 crore, a substantial increase from ₹22,682 crore in the equivalent period the previous year. The average ticket size for loans in Q1 FY24 stood at ₹11,043, although there were varying figures among companies.

The report highlights that three-fourths of the surveyed companies demonstrated positive annual growth in comparison to the same quarter of the previous fiscal year. This positive trend reflects the industry’s ability to meet the credit needs of previously unaddressed segments.

In addition to this growth, the report suggests that fintech lenders are actively embracing the account aggregator (AA) framework. Over 25 percent of FACE member companies already utilize the AA framework, enabling them to disburse approximately 4 percent of their loans through this channel. As the AA framework continues to develop, it is expected that more fintech lenders will adopt this approach and further streamline their lending operations.

Sugandh Saxena, the CEO of FACE, expressed satisfaction with the industry’s progress and its ability to adapt to regulatory requirements. Saxena also emphasized the importance of the industry’s commitment to customer-centric practices and value creation, as outlined in the new upgraded Code of Conduct.

This report from FACE provides an insightful overview of the digital lending landscape in India, showcasing the industry’s strong growth in loan volumes and value during Q1 FY24. With the continued adoption of the AA framework and a focus on customer-centric practices, the digital lending sector is well-positioned for further expansion and innovation.

– Fintech Association for Consumer Empowerment (FACE) report