It can be seen that as demand and business increase, there is a greater focus on safeguarding consumer interests.
The year 2021 was crucial for the development of the Indian consumer credit segment. Catalyzed by the circumstances caused by the pandemic, the credit scenario saw massive change, with digitized operations taking center stage.
Madhusudan Ekambaram, co-founder and CEO of KreditBee and co-founder of FACE, says: “The main factors influencing the trend were increased demand, a more borrower-friendly approach by lenders, less paperwork in the application process and high availability of credit. This reflected a greater emphasis on the properties of convenience and speed by borrowers in obtaining loans that were adequately serviced by loan service providers. This was made possible by low overhead costs and the use of effective technology. “
According to industry reports, personal loans dominated credit demand, which can also be seen from the fact that they accounted for over half of the digital loans issued by banks in terms of value. Experts also say the nature of credit preference has changed with increased demand for small loans and services like Buy Now Pay Later (BNPL). While BNPL loans accounted for less than 1 percent of the value of the loan, the loan instrument accounted for 37 percent of the number of loans.
Ekambaram says, “Given the dynamism of personal credit growth, one can only expect an upward trend. Fiscal 2022 will certainly see further technology integration combined with more effective loan products. Digital maps have proven that they reflect the success of BNPL. The innovative tool is more scalable and fits well with the universal purchase cases. “
It can be seen that as demand and business increase, there is a greater focus on safeguarding consumer interests. For example, experts believe that recent central bank regulations, as well as the formulation and operation of businesses, are indicators of the healthy growth that the ecosystem is seeking.
“The level of scrutiny in the segment will continue to increase in 2022 given the dynamism of the industry. This will advantageously lead to a more inclusive financial environment with credible lenders and greater consumer awareness, ”adds Ekambaram.
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