India's Digital Lending Reset
India’s digital lending sector is currently in a reset mode as the contracting GDP, moratorium, & Covid-19 has forced companies to adopt digital, review credit models & more. This playbook takes a deep dive into the challenges and new pathways adopted by digital lending startups for survival and scale!
‘One man’s meat is another man’s poison’
As well-intentioned as it may be the Reserve Bank Of India and the central government’s primary measure to bring relief to the middle-class populace and small businesses has badly dented the other side of the coin. And by that, we mean the very lenders that were asked to support this audience that had been badly hit by the pandemic’s economic impact.
According to reports by the All India Manufacturers’ Association (AIMO) and big data analytics firm Spocto, between 35% and 78% of MSMEs have either downed their shutters or are in the process of shutting shop in India right now. India has currently over 65 Mn MSMEs and even if we go by the more conservative estimate, this results in the closure of 22.75 Mn MSMEs. The startups, too, have been among the worst affected businesses with about 37 highly funded startups including Swiggy, Ola, Zomato, PaisaBazaar have laid off over 12K employees.
According to the Centre for Monitoring Indian Economy, 19 Mn salaried people have lost their jobs since April.
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