Digital Lending : A Technological Revolution Reshaping Financial Services

Updated On : Sep 2023

Technology acts as a pivotal catalyst in the realm of digital lending, reshaping the entire landscape of financial services. From streamlined application processes to real-time credit assessments, technology has revolutionized the borrowing experience.

Digital lending represents a transformative technological revolution in the financial services sector. Leveraging cutting-edge technology, it streamlines the borrowing process, making it more efficient, accessible, and convenient for individuals and businesses alike. By harnessing data analytics, artificial intelligence, and mobile platforms, digital lenders can assess creditworthiness swiftly, resulting in faster approvals and disbursements. This innovation democratizes finance, expanding access to credit for underserved populations.

According to the Fintech Association for Consumer Empowerment (FACE) report, digital lending disbursements witnessed a significant 32% surge in Q1 of the fiscal year 2023–24, amounting to Rs 29,875 crore. This marks a substantial increase compared to the previous year's Q1 disbursement of Rs 22,682 crore. This shows a positive growth in the lending industry in India due to the adoption of digital solutions.

Here are how digital lending trends are simplifying credit access for India's growing retail lending sector:

• Risk assessment with digital transactions:
  

  Digital payment data is a vital metric for gauging a borrower’s financial health. It offers valuable insights to lenders, aiding them in making informed decisions. By analyzing digital transaction data, lenders can assess risk more accurately and provide businesses with tailored financial solutions.

• Faster loan repayments with digital payments:
  

  Digital lending platforms simplify loan repayments with seamless digital options, enhancing the borrower's experience while promoting credit discipline. Offering flexible daily repayment schedules aligned with cash flow cycles, these platforms empower retailers to manage finances more efficiently.

• Quicker TAT with digital lending software:
  

  The digital lending software handles the complete lending process, which includes loan origination, loan management, collection, and recovery. Digital lending software accelerates loan processing, resulting in a quicker Turnaround Time (TAT). This efficiency benefits both lenders and borrowers, reducing waiting periods and enhancing the overall lending experience.

• Leveraging India Stack and Ecosystem Development for Digital Transformation:
  

  The third-party integrations with e-KYC, GST, Aadhaar, and Digilocker have enhanced the efficiency of the financial ecosystem. These integrations provide a summary of tax information, strengthen security, enhance trust, and secure digital document storage, helping to provide seamless access to the data.This has empowered businesses and government initiatives to create efficient, accessible, and inclusive solutions that benefit the nation's economic growth and overall development.

The future of digital lending looks promising, with increased accessibility and improved financial opportunities for borrowers, all thanks to the remarkable influence of technology.

Nelito’s Fincraft^TM Integrated Lending Management Solution (ILMS) is an end-to-end lending software tailored to NBFC and MFI’s operations on the ground. This comprehensive software covers both operational and strategic requirements, resulting in enhanced customer service through technology with a human touch.

To learn more about our software, write to us at marketing@nelito.com