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Loan disbursals by digital lenders have doubled in volume and value terms in Q3FY23, said a report on Tuesday.
Digital lenders disbursed around 18 million loans worth Rs 18,537 crore during this period, up 147 per cent in volume terms and 118 per cent in value of terms, said the report by Fintech Association for Consumer Empowerment (FACE).
Sequentially, growth was slower as digital lending volumes and value grew by just 6 per cent and 2 per cent.
Digital lenders in Q3 had to implement new guidelines set for them by the Reserve Bank of India (RBI), prompting experts to say that business may slow down.
“Fintech lending is accelerating the expansion of formal credit in the country across unserved and underserved market segments. Data from the latest quarter is again a demonstration of customers’ trust and preference for fintech lending and fintech lenders’ ability to meet the credit demand as they align to digital lending guidelines (DLG),” said Sugandh Saxena, chief executive officer of FACE.
“On the solid foundation of DLG, fintech lending will expand and get better, with a stronger focus on robust systems and processes safeguarding customers’ interests and creating value,” said Saxena.
Of the 29 digital lenders under the ambit of FACE, all but three registered a positive growth on a year-on-year basis, but the growth rate varied significantly across companies. However, on a sequential basis, nearly two-thirds of the companies registered positive growth rates in Q3 FY23 compared to Q2 FY23, and more than half reported a slower growth rate in Q3 FY23 over Q2FY23 compared to the previous quarter.
On an average, the processing fee spread (range between minimum and maximum) is 1.6 per cent to 6.2 per cent, and the interest rate spread is 15.2 per cent to 37 per cent. Several factors, including the cost of funds, operations and risk profile of customers, influence the pricing for the customers, and the range reflects the same, said the FACE report.
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