Nearly nine in 10 customers in India use fintech lending apps to take loans for emergencies, medical and upskilling needs, a new report said on Thursday.
More than two-thirds feel positive after taking a loan via digital means and 89 per cent reported positively toward digital lending apps, according to the report by the Fintech Association for Consumer Empowerment (FACE), an association of digital and fintech lending companies.
‘Customer voices are very reassuring to know that digital credit is meeting customer’s critical needs making them resilient to deal with day-to-day exigencies (medical/emergencies/cashflows) and also invest in their future and aspirations,’ said Sugandh Saxena, CEO at FACE.
A Reserve Bank of India Working Group (WG) report has recommended steps for customers’ access to genuine and safe regulated lending apps.
‘Equally important is customers’ understanding of loan conditions including the pricing to take a loan they can afford and the ability to connect with lenders for queries/grievances,’ Saxena added.
To date, 45 per cent have used one app to borrow digitally, while 55 per cent have used two or more apps to fulfill their credit needs.
In the absence of a digital lending app, 43 per cent would borrow from their friends and family, but a significant 29 per cent would delay or forgo the need.
Top three parameters customers consider when choosing a digital lending app are loan amount, customer reviews/ratings of the app and ease of use.
‘Top problems customers face when engaging with a digital lending app are identifying the right app, customer service, understanding terms and conditions,’ the report mentioned.
For the large majority, the need for a loan is urgent and real, and they have had to compulsorily fund it, it added.