As per a recent report shared by World Bank, India is all set to regain its position as the world’s fastest growing major economy as “factors holding back growth in India fade”. Indian economy is advancing to 7.3 per cent this fiscal year and 7.5 per cent in the next two. The bank’s Global Economics Prospects report stated that India has overcome the temporary disruptions caused by implementation of Goods and Service Tax (GST).
The report further added “the per capita growth rates of India are strong and are expected to bring down poverty in coming years”. The growth in Indian economy boosts consumer confidence so much that people are more likely to be making large purchases.
Overview and Scope of Digitization
Digitization has played a key role in the overall economic expansion of India. Moving Indians from cash transactions to digital transactions be it debit cards, credit cards or mobile wallets has proved to be a major propeller in the economic development.
Today, India has more than 800 million unique mobile users and more than 430 million Indians have internet access which is why the government is constantly working towards cashless payments by restricting values of cash transaction and incentivizing digital payments.
Also read: Role of Digital Lending in the Evolution of Consumer Spending Behaviour
Considering India’s economic growth and the growing ability of people to spend more on consumer durables, the Fintech market in India is expected to reach $2.4 billion by 2020.
This is because the Fintech companies have completely transformed the lending process in India. Today many Fintech companies like Home Credit are providing consumers easy and instant access to loans. Digital lenders have combined financial services with the latest technology to make it extremely easy for consumers to access personal loans from the ease of their homes with just a few clicks. Unlike the traditional methods of lending which required paying multiple visits to the bank, waiting in queues for hours and waiting for days and even months to hear from the bank for loan approval, the digital lenders today understand the value of time and have come up with a 100 percent online lending process where the customer gets a loan within just a few hours. With easy repayment options one can also easily repay the loan to the digital lender without burdening his finances.
With less than 20 million users in India having a credit card the opportunity for Fintechs is immense. The Bank loan growth in India** increased significantly from 4.10 percent in March 2017 to 10.30 percent in March 2018 indicating that more and more people today are applying for a cash loan from the Fintech companies to fulfil their requirements.
The instant disbursal of loans from online finance providers is also helping the consumer durable market to grow exponentially. In a latest report submitted by ICRA the consumer durable market is all set to grow at a rate of 21-24% per year because of instant and easy loan schemes offered by online finance providers to their customers. Isn’t that great?
Contributing eight per cent to nation’s GDP, MSMEs – Micro, small and medium enterprises are also one of the major contributors to the Indian economy. With the ease in digital lending, more and more MSMEs will emerge as stronger and better contributor to the nation’s GDP and economic growth.
