According to a recent report by Equifax and FICCI, personal loans remain the most popular fintech product, accounting for 96% of the total disbursement volume. This highlights the growing popularity of personal loans among consumers looking for quick and easy access to credit. As the fintech industry continues to gain momentum, online lending platforms and other fintech lenders are increasingly leveraging technology to improve their loan origination, underwriting, and servicing processes, and enhance their competitiveness in the market.
Fintech lenders have disrupted the traditional lending landscape by offering a convenient and hassle-free digital lending process that can be completed entirely online. This has made personal loans more accessible to a wider range of borrowers, including those with no credit history or low credit scores. As a result, alternative lending through fintech platforms has become a popular alternative to traditional lending institutions.
Another interesting trend highlighted in the report is the growing popularity of digital channels for loan disbursement. Digital channels accounted for 80% of personal loan disbursements in FY 2021, up from just 35% in FY 2019. This is further evidence of the shift towards digital lending platforms and the growing importance of technology in the lending industry. With the rise of digital channels, fintech lenders need to ensure that they have the right loan automation infrastructure and tools in place to effectively manage loan applications and disbursements.
Given the high volume of personal loans being disbursed, loan management software has become an essential tool for fintech lenders to efficiently manage their loan portfolios and meet the growing demand. By leveraging loan management software, lenders can automate tasks such as credit checks, document verification, and loan servicing, making the lending process faster, more efficient, and less prone to errors. Loan analytics tools can also provide lenders with valuable insights into their loan portfolio performance, including loan disbursal rates, repayment patterns, and delinquency rates. This can help lenders identify areas for improvement and make data-driven decisions to optimize their lending practices.
The use of loan management software can also enhance the customer experience by improving communication, providing personalized loan offers, and enabling borrowers to manage their loans more effectively. This can help fintech lenders build a loyal customer base and drive long-term growth in the digital lending market.
In conclusion, the growth of the personal loan market and the increasing use of digital channels for loan disbursement underscores the need for efficient loan management software for fintech lenders. By leveraging loan origination and loan servicing technology to streamline the lending process, lenders can meet the growing demand for personal loans, improve their lending practices, and remain competitive in the alternative lending market.