PremiumThere were several significant developments, and standards for digital lenders in 2022, and the complexities have been evolving. With the development of technology-driven fintech businesses and the advancement of digital and innovative services, digital lending has become a popular option in India and is now easily available to small businesses as well. The RBI was seen to provide significant backing to digital lenders in 2022 in order to maintain their ongoing development trajectory. Measures undertaken by the RBI in 2022 include the upcoming Data Protection Bill, the Account Aggregator framework, and the standards for digital lending.
Mr Satyam Kumar, CEO & Founder- LoanTap said “This year represented a new turning point in the fintech industry, with increased client acceptance and clear guidelines, allowing for greater stability. As shown in recent months, new developments in digital lending and the way customers apply for and use loan products will shape the future. Better economic prospects, as a result of increased loan demand, are projected to enable NBFCs to achieve 11% to 12% growth in the fiscal year ending March 2023, a four-year high, to above ₹13 lakh crore. The RBI issued new guidelines in 2022 forbidding the loading of credit lines into non-bank prepaid instruments (PPIs) like wallets and prepaid cards. This rule was a small step toward fintech sector recognition. We regarded this rule as the culmination of the efforts of several entrepreneurs and investors who believed in fintech as something more than just banking over the previous 6–7 years. As the sector shifted, new RBI requirements caused companies to reconsider their business approach. Today, the total financial services business is undergoing a significant transformation, and new technologies such as AI, ML, and cloud infrastructure are being used to build new products for the market more than ever before."
Mr. Vishal Bhatia, CFO, Balancehero India said “2022 saw India becoming one the fastest growing countries in the world. The wave of innovations, exponential growth and large-scale digitization of the financial sector has also had a positive impact on financial inclusion. The future holds tremendous potential, with the industry's market size predicted to reach $150 billion by 2025 and $200 billion in revenue by 2030. To continue this momentum and strengthen the economy further, we strongly believe the government must adopt some specific measures in the upcoming Union Budget. A very strong focus needs to be laid on priority sector lending- credit access should be granted to those who are otherwise deprived of the facility. In other words, measures should be directed towards ensuring that market participants have enough liquidity to support the new to credit customers. Further, the government should implement the necessary measures for improved partnerships with banks."
“We expect that the budget will contain supportive initiatives that will enable cutting-edge lending systems that can guarantee high-quality performance while preparing for the upcoming wave of transformation. The government should broaden the eligibility criteria for tax reliefs to start-up employees to alleviate the tax burden that Employee Stock Ownership (ESOPs) borne by them. While, the industry is working on direct benefits to borrowers of personal loans in the form of tax benefits, they demand indirect benefits for fintech sector to be empowered with the ease of doing business. This would ensure that lenders extend these benefits to the end users. The government should allocate funds to stimulate the creation of new ideas that would foster paperless digital lending and stronger partnerships. To improve customer and business experiences, credit quality, and expedite the expansion of financial organizations, we anticipate that the government will place a greater emphasis on the creation of digital infrastructure, said Mr. Vishal Bhatia.
Anil Pinapala, CEO and Founder, Vivifi Finance said “The retail borrowers’ best interests lie at the core of all RBI mandates. This year too, will see the regulator working towards protecting customer interest and restricting all lending activities to Regulated Entities only. Responsible practices and consumer protection will continue to be the focus of regulations and standardization of communication to the borrower will bring about “Truth in Lending" activities. This environment will focus on keeping the unscrupulous lenders out of the fray and also structures that are not in the best interest of the retail borrower. We believe that the lending landscape will align to these objectives of the RBI and will scale to its full potential making consumption led credit the driver of growth."
“The year 2023 will witness the growth and success of licensed NBFCs and fintechs working towards addressing the credit needs of the 300+ million under-served / unserved borrowers," said Anil Pinapala.
Souparno Bagchi, COO, True Balance (Balancehero India) said “Regulations will further encourage all fintech, particularly digital lenders, to safeguard consumer interests, lower financial system risk, and foster innovation, all of which will ultimately enable and fastrack financial inclusion. Both consumers and businesses will benefit from it, and it will ensure the market for digital financing is accessible, secure, and inclusive. The creation of self-regulatory organizations specifically for digital lending may occur in 2023, a much anticipated possible development that will encourage more accountability for consumer rights from regulated firms. The co-lending model, in which banks / NBFCs work with digital lenders, will find widespread favour, and Digital Lenders which are Fintech NBFCs will succeed."
“We believe that the digital lending market will expand significantly by 2023. Rising per capita income, greater financial inclusion, and greater internet access in rural areas all contributing to this. We anticipate assisting the efforts of authorities and businesses as the technology and product sides of the fintech industry expand with advanced India Stack solutions, sandboxes, and other tools. Fintech operating in the lending, wealth management, and insurance sectors, will gain importance as they demonstrate depth and scalability potential. The year 2023 will see the rise of responsible fintech, which is governed, compliant, and customer-centric. Thanks to the experience of ‘Bharat’ and ‘India’ Indian fintechs can well position themselves for global expansion across countries with a wide spectrum of socio-economic strata," said Souparno Bagchi.