Digital lending is gaining high momentum in the country. During the July-September quarter, fintech companies, accepting online applications and processing loans, distributed loans worth a total of 14, 016 crore rupees, which is 216% more than the total loan distributed during the same quarter one year ago. As per the Fintech Association for Consumer Empowerment (FACE), a quick increase can be seen in both the number and value of loans being distributed through digital lending apps and websites.
During the last quarter, a total of 1.63 crores was distributed as loans, which is 1495 more than the loans distributed during the September quarter in the last year. Along with this, the average loan size distributed during the last quarter also increased 27% to 8, 602 rupees.
Sugandh Saxena, CEO, FACE, said that fintech companies have strictly followed RBI rules as far as digital lending is concerned, because of which credibility related to their ways of operation has increased. RBI has issued clear rules and regulations for online loan distribution.
The processing fees imposed by digital platforms is between 1.1 and 5.3%, and the annual interest rates are between 14.5% and 38.3%, as compared to which, the processing fees of banks are 0-5% and the annual interest rate is 7.90-31.50%.
