Data to diversification: 7 things digital lenders must do to manage risks

Assessing is challenging for digital lenders as they have to rely on alternative data sources and algorithms to evaluate creditworthiness

Every adversity brings with it the seed of an equivalent advantage, said Napoleon Hill in his bestselling book Think and Grow Rich. Covid-19 proved him right. As part of efforts to boost financial inclusion and credit penetration, India’s government seized an opportunity amid the pandemic to push digital lending. With the proliferation of smartphones and Wi-Fi offering tailwind, credit growth zoomed. Such growth touched a decadal high of 15.9 per cent in FY23 at Rs 148 trillion, according to our ratings division’s estimates.
 

The push for financial inclusion and the rise of e-commerce and digital payments have created new opportunities