DIGITAL LENDING MARKET ANALYSIS

Market Concentration and Competitive Landscape

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With rising aspirations and changing lifestyles, there is a rising requirement for more customized and specialized financial solutions catering to diverse needs. Needs which were previously fulfilled through informal avenues or not addressed at all. Therigidity of traditional banks in terms of eligibility, documentation and turnaround times does not permit them to offer differentiated products at large scale. However, digital lending platforms have stepped in to fill this void with new-age solutions.

There has been huge demand for small-ticket personal loans for purposes like funding hobbies, one-time expenses, vacations and others.  Millennials want instant credit solutions to shop online without having to use savings. New businesses need working capital or inventory funding at short notice to cater to spikes in demand. Digital lenders have designed loan programs tailored for each segment after thoroughly understanding their profile and risk appetite. Furthermore, their use of alternate data sets and new-age analytical models have enabled approval of loans to customers who would otherwise be rejected by banks. This shift towards a more inclusive and customized model of lending is driving the market growth.