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Business News/ Industry / Retail/  Fintech players expect bumper sales during this festive season by 15-20%
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Fintech players expect bumper sales during this festive season by 15-20%

While a surge in demand doesn't always lead to a corresponding rise in disbursements for digital lending platforms, overall disbursements tend to increase by an average of 15-20 percent during the festive period

The optimism comes as the traditionally buoyant December quarter is likely to see activity in consumer-facing businessesPremium
The optimism comes as the traditionally buoyant December quarter is likely to see activity in consumer-facing businesses

The digital lending industry is anticipating a strong resurgence in business, and can expect as much as 15-20 percent increase during the festive season, The Economic Times reported. The optimism comes as the traditionally buoyant December quarter is likely to see activity in consumer-facing businesses, it added.

The fintech sector is better positioned to cater to increased demand credit this year, on back of stronger and more profitable balance sheets compared to last fiscal, the report said. 

While a surge in demand doesn't always lead to a corresponding rise in disbursements for digital lending platforms, overall disbursements tend to increase by an average of 15-20 percent during the festive period, it added.

Industry View

Digital payments giant Paytm expects a revival in credit demand in the next three months, partnering with new lenders for the Diwali season, as per its earnings report last week.

Amazon reported that 25 percent of shopping orders on its platform in India were funded through instalments, with three out of four easy monthly installment (EMI) offers being no-cost ones, as per the report.

Bengaluru-based fintech Axio, a major player in pay-later loans on Amazon, has seen a doubling in applications and a threefold increase in loan disbursals during the festive season, it added.

Prithvi Chandrasekhar, CEO of InCred Consumer Finance told the paper that the industry faced many disruptions over the last many years, including COVID-19, the IL&FS incident, demonetisation, GST introduction and new digital lending guidelines; which were absent this year. InCred typically observes a twofold increase in credit demand during the festive season, he added.

“When we lend to businesses, demand builds over a two- or three-month period ahead of the festive season," Arun Nayyar, MD of NeoGrowth told ET. The Mumbai-based fintech aims to achieve quarterly credit disbursals of 750 crore during the current festive season.

Business Loans on Uptick

MSME-focused lender FlexiLoans anticipates a 50 percent increase in loan applications, with disbursements expected to double compared to the previous quarter.

Loan inquiries have increased by 150 percent in recent months, according to Hardika Shah, founder of Kinara Capital.

The demand for business loans is being primarily driven by component manufacturers in the consumer durables, automobile, and textile industries, the report noted. 

Digital Lending Business

A report by Experian and the Digital Lenders' Association of India indicates that digital lending volumes in the country have grown at an annual rate of 39.5 percent over the last decade, reaching $350 billion from $9 billion.

Facilities like Aadhaar, digital customer onboarding, and e-KYC are enabling more consumers to apply for credit online. Fintech firms are also focusing on buy-now-pay-later loans, which are gaining popularity both in offline and online stores, it added

While banks and NBFCs have historically dominated this segment, the fintech lending industry is becoming a more significant player in the credit landscape due to the overall digitization of the economy. It is now seeking a larger share of the credit market.

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Published: 23 Oct 2023, 12:20 PM IST
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