2019 Third Quarterly TransUnion CIBIL Industry Insights Report, for credit cards, new-to-credit consumers dropped to 18.6 per cent, as compared to the 26.2 per cent in Q3 2018. Similarly, for personal loans, new-to-credit consumers dropped to 16.5 per cent in Q3 2019 from 17.3 per cent in Q3 2018.

With the lending process having slowed down in the current scenario, it is expected that these numbers will drop further.

 

Cautious lenders

The current financial crisis has made digital lending platforms cautious towards new consumers. In an interview with The Hindu BusinessLine, Gaurav Chopra – president of Digital Lending Association of India – said that evaluating existing customers is much easier “while new customers are difficult to assess.”

Even though …

exhaustive paperwork, convincing loan officers and whatnot. Digital lending platforms have been able to use their proprietary technology to ensure services are meted out in a timely and cost-effective manner. However, lenders don’t always ensure consumers have availed their products.

With the pandemic situation, according to The Hindu BusinessLine, many fintech digital lenders are cautious especially towards new borrowers. In March, a lender gave out only 56 per cent loans of the monthly loan applications they received. This exposes an increasing gap between consumers and digital lenders in India.

 

An exposé of digital loan aggregators

Let’s have a look at them one by one.

  • Lack of human connection

While loan aggregators and digital platforms strive for paperless KYCs and contactless approvals, they forget something in …