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Digital Lending Surges with 40% Growth in Q2 FY 23-24: FACETS Report

The report revealed that digital loan disbursement volume and value increased by 39 per cent and 43 per cent, respectively, crossing 2.4 Cr loans worth Rs 31,692 crores in Q2 FY 23-24

Digital Lending Surges with 40% Growth in Q2 FY 23-24: FACETS Report

Outlook Start-Up Desk

POSTED ON December 13, 2023 4:13 PM

Digital lending is crucial for providing credit to underserved markets in India. According to the 8th edition of the FACETS report by the Fintech Association for Consumer Empowerment (FACE), which represents digital lenders, there has been significant annual growth in both the volume (39 per cent) and value (43 per cent) of digital loan disbursements. The report analyzed data from 37 member companies of FACE. 

Commenting on the eighth edition of FACETS, Sugandh Saxena, CEO at FACE, said, “Data signals strong customer confidence in digital lending. It reflects digital lenders' steadfast commitment to bringing vast unaddressed segments to formal credit with superior experience, choice, and convenience.

The regulatory foundation and fences are shaping the industry to grow and mature wholesomely, constantly investing and improving customer protection, underwriting models, and portfolio quality.” 

Some of the key insights from the report are as follows: 

  • FACE member companies disbursed 2.44 crore loans during Q2 FY 23-24, an increase of 39 per cent compared to Q2 FY 22-23 and a 10 per cent increase over the previous quarter.   
  • Disbursement value increased by 43 per cent in Q2 FY 23-24 from Q2 FY 22-23 to reach Rs 31,692 crore compared to Rs 27,673 crore last year. More than three-fourths of the companies reported a positive annual growth over the comparable quarter in FY 22-23. 
  •  The total Asset Under Management (AUM) of fintech lending companies was Rs 36,169 crore, with 69 per cent as an on-balance sheet. For companies who are NBFC/own NBFC, 79 per cent of the AUM is on their balance sheet.
  • Data on Customer redressal shows 97 per cent of all customer grievances being resolved within 7 days and 41 per cent within a single day.    
  • Over 25 per cent of complaints were related to credit bureau updates and disputes, followed by app-related grievances (15 per cent) and disclosures (11 per cent).  

Fintech Association for Consumer Empowerment (FACE), a non-profit industry association, set up in Sep 2020. FACE brings together fintech lenders (regulated entities and platforms/aggregators partnering with the regulated entities) and other stakeholders committed to advancing fair and responsible digital lending practices through self-regulation and customer-centricity. 

FACE members account for an estimated 80 per cent of the retail fintech lending volumes and abide by the FACE Code of Conduct. Working with the fintech lenders and other ecosystem players, FACE pursues customer empowerment through its work in self-regulation, policy advocacy, knowledge, standards, market monitoring, and customer insights.

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