It seems customers are going too far in Diwali shopping this year to make up for their inability to fully celebrate over the past two years due to various Covid-induced restrictions.
As people scramble to celebrate the festivities this year, digital lenders are seeing a surge in demand for small loans.
“The October to December quarter is marked by a large number of festivals in India and retail consumption swells significantly as people spend on items ranging from electronics to precious metals, cars, etc. . increase considerably. This growing consumption has a double impact: first, it leads to an increase in demand for credit among consumers and, secondly, there is increasing competition between digital lenders to capture the largest share of this increase in demand. loans,” said Sankalp Mathur, Co-Founder & CRO, Niro.
Various offers and discounts – from both sellers and lenders – also entice people to borrow money to buy more.
“The whole market is flooded with huge cashback offers, instant rebates and pre-approved personal loan offers. In this festive season, in order to facilitate access to loans for individuals, various banks, NBFC and digital lenders across the country are offering lucrative credit offers to their customers,” Mathur said.
“In consumer lending, players like Bajajfinserv offer EMI options at no cost to their customers. SBI Yono also offers credit to customers with zero processing fees and attractive interest rates on auto, gold and personal loans,” he added.
Online stores like Amazon, Flipkart are also collaborating with lenders to attract more customers by offering additional discounts on various payment methods.
“Digital lenders are also partnering with e-commerce platforms such as Flipkart and Amazon during their ongoing holiday sales to reach their vast network of consumers,” Mathur said.
“Major banks like Axis, Citi and ICICI are offering 10% instant cashback up to nearly Rs 8,000 on various e-commerce platforms and fee-free EMIs on some. In an attempt to make the borrowing process easier for consumers this festive season, we at Niro are also offering a full processing fee refund to some of our customers for our pre-approved integrated personal loan program,” it said. -he adds. .
Increased customer demand is also pushing businesses to produce more, which also increases the demand for business loans.
“We have seen credit demand doubling year-on-year in our MSME borrower base ahead of the holiday season. This is accompanied by a strong preference for digital loans among MSMEs due to the ease, speed and accessibility that technology-driven credit offerings bring to the table,” said Siddharth Mahanot, Co-Founder and COO Indifi Technologies.
“At Indifi, we have collaborated with digital ecosystems such as Gpay, Facebook, Amazon, Swiggy, etc., which MSMEs leverage for distribution, payments, etc. Data-driven underwriting, AI/ML-powered speed of disbursement, zero-human lending process, and end-to-end guided digitized experience make access to capital extremely seamless for MSMEs. This becomes even more crucial for MSMEs preparing for the festive season as they seek hassle-free, personalized payment cycles with fast disbursements,” he added.
