Indian consumers have limited knowledge about digital loans
One-third of high-confidence customers lack understanding on how to detect illegal lending apps: Report
Mumbai: One-third of high-confidence customers in India have limited knowledge about their digital loans, and lack understanding on how to detect illegal lending apps, finds a report on Tuesday.
The report by the Fintech Association for Consumer Empowerment (FACE) shares insights from a customer survey conducted between December, 2023 and January, 2024 to systematically understand gaps in users' approaches and knowledge about Digital Lending Applications (DLAs) in India and drive action to address them.
Almost all customers know the lender's name, but less than a third know about the key fact statement and grievance redressal mechanism. Over 57 per cent of respondents reported checking the loan app's affiliation with NBFC or Bank as the most crucial verification factor, while 55 per cent said they consider reviews and ratings.
Over three-fourths of users noted that they ignore downloads and data-sharing metrics when deciding about lending apps.
"Unscrupulous players hit the very core of the market, that is, customer trust for digital loans, harming customers and damaging the reputation of responsible digital lenders. We note that users are aware of downloading apps from the Play Store and checking the app's partnership with NBFCs/Banks, ratings, and reviews," said Sugandh Saxena, CEO at FACE.
