Digital lending apps continue to see robust demand from customers and there is more self regulation in the sector since the exit of Chinese lending apps, believe players.

“There are always bad apples in any business, but one should not paint the whole sector bad,” said Anuj Kacker, co founder, MoneyTap.

According to him, demand from customers has been high for quite some time due to a variety of issues, including improvement in the economy, return to some level of normalisation with offices opening up, people going on holidays, as well as the exit of Chinese apps.

“MoneyTap is seeing a 40 per cent to 50 per cent growth quarter-on-quarter in disbursements, and we had already reached pre-Covid levels by November and December 2020,” said Kacker.

Ranvir Singh, Managing Director and Co-founder of EMI payment and digital lending platform Kissht, also said there continues to be high demand for loans, especially after the crackdown on illegal Chinese lending apps.

“We also got impacted by the Covid-19 lockdown and pandemic, and our disbursement and collection were lower by 20 per cent in December and almost the same in January as well. However, from the last week of January, at the time of Republic Day, some of these issues receded,” said Singh, adding that the actual conversion is lower.

According to Singh, the general cost of customer acquisition has also come down, but this just may be a transient impact. “Earlier, what used to be about ₹300 to ₹350 to acquire a customer has come down to as low as ₹150 to ₹175,” he said.

Strict underwriting

However, most digital lenders are remaining cautious about customers. “In terms of underwriting, we have tightened norms post-Covid,” said Kacker.

Singh also agreed and said that many people who apply for loans nowwere earlier being served by Chinese companies, and may not have the capability to pay and so the conversion rate from an application is lower.

Self regulation

Players also believe that issues of harassment that were being reported about many companies in the sector are now easing as there is more self regulation and companies are more conscious.

The Reserve Bank of India had, in January this year, also set up a working group on digital lending, including lending through online platforms and mobile apps.

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