The Influence of Digital Lending in Driving India’s Growth

In today’s era of smartphones and rapid technological progress, our lives are more connected to digital solutions than ever before. One of the most significant revolutions is the change that digital lending has brought to the FinTech industry. The rise of digital lending platforms has made lending easy, effective, and personalized.

With FinTech companies leveraging technology to deliver financial services in innovative ways, such as through digital lending platforms, the way Indians save, invest, and spend is undergoing a significant transformation. This is not only convenient and secure but also affordable and is playing a key role in reshaping the financial landscape in India.

According to the Indian Ministry of MSME’s Annual Report for FY18, India had 63.3 million Micro, Small, and Medium Enterprises (MSMEs). These businesses, typically defined as those with annual revenues of up to INR 250 crore, played a crucial role in the economy, contributing 30% to India’s GDP, 45% to the country’s total manufacturing output, and 40% to its exports in FY18.

Despite contributing over 30% to the GDP and providing employment to more than 100 million people, MSMEs have long struggled to secure credit through traditional financial channels. Challenges such as limited collateral, complex documentation requirements, and lengthy processing times have made it difficult for these businesses to access the funds needed for growth and sustainability. An increasing number of MSMEs are turning to digital platforms to secure credit, resulting in increased investment, market expansion, and job creation. The user-friendly nature of digital lending platforms enables MSMEs to navigate their financial needs with ease.

Role of Digital Lending in Paving the Way for Easier Credit Access

• Digital lending platforms gauge borrowers’ financial health and guide lenders in making informed decisions by analyzing their data to accurately assess risk.
• Digital lending platforms simplify loan repayments with digital payment options enhancing borrowers’ experience.
• With comprehensive digital management software, handling loan origination, loan management, loan collection, and recovery is easy. This helps accelerate the loan processing time, resulting in a quicker TAT, which benefits both the lender and the borrowers.
• Integrating with third-party integrations such as e-KYC, Aadhaar, and Digilocker has enhanced the efficiency of the financial ecosystem. This has empowered businesses and the government to create efficient, accessible solutions that benefit our country's economic growth and overall development.

India’s digital lending market has certainly experienced remarkable growth over the past decade. In 2023, the market was valued at approximately USD 75 billion and is now projected to grow at a compound annual growth rate (CAGR) of 22%, reaching USD 515 billion by 2030 (6Wresearch). This rapid expansion, fueled by increasing internet penetration, widespread adoption of smartphones, and a growing preference for online financial services, is sure to take India’s financial capabilities to a whole new level.

The impact of digital lending solutions and platforms goes beyond convenience to making it more about how we manage our finances. Embracing this change and finding the right digital lending platform is a vital step toward financial empowerment. ZIVA? is a comprehensive digital lending solution platform that simplifies managing your entire loan lifecycle. Our digital lending platform is crafted to meet the requirements of lending businesses of all sizes across various spectrums.?

Book a demo with us to learn more about ZIVA? and elevate your lending gameplay to the next level!