Latest news with #DigitalLending
Time of India
5 days ago
- Business
- Time of India
Fintech-driven personal loans show rising stress, delinquencies at 6-quarter high
Small-value personal loans disbursed by fintech companies continue to show signs of stress. Data released by the Fintech Association for Consumer Empowerment (FACE), the Reserve Bank of India (RBI)-recognised self-regulatory organisation in the fintech sector, shows that personal loans overdue by more than 90 days rose to 3.6% at the end of March 2025—the highest level in the last six quarters. The biggest pressure is coming from loans disbursed in Tier-3 cities and beyond, which contributed 4.2% to the delinquency rate, followed by rural areas at 4.1% and semi-urban regions at 3.8%. In terms of borrower age, those under 25 accounted for 6.1% of delinquent loans, while the 26–35 age group contributed 3.6%. Out of the total personal loan market of Rs 8.80 lakh crore, fintech NBFCs held a 74% share by volume—amounting to 10.9 crore loans—and a 12% share by value at Rs 1.06 lakh crore as of March 2025. 'Fintech lenders are clearly becoming the preferred choice for borrowers across age groups, risk profiles, and geographies,' said Sugandh Saxena, CEO of FACE. 'With customised, digital-first offerings and a solid regulatory foundation guided by the RBI's Digital Lending framework and our self-regulatory efforts, the sector is well-positioned to offer responsible credit at scale. Particularly encouraging is the growing uptake among young borrowers and consumers from Tier-III towns and beyond, signalling the potential for a more inclusive and resilient financial ecosystem.' The average ticket size of these loans stood at Rs 9,786. Growth in both sanction volume and value slowed compared to the previous years. As of March 2025, fintech loan outstanding stood at Rs 73,311 crore across 4.59 crore loans. Live Events FACE data showed that sanction volume grew by 22% in FY25, compared to 33% in FY24 and 73% in FY23. Sanction value grew by 11% in FY25, slowing from 36% in FY24 and 66% in FY23. The report also highlighted that 66% of the total sanctioned value went to borrowers under the age of 35, reflecting a strong preference for digital credit among younger consumers. Additionally, 39% of sanctioned loans were directed to borrowers in Tier-III towns and beyond—a share that continues to increase steadily. While the average loan size was Rs 9,786, nearly 46% of the total loan value came from tickets above Rs 50,000, indicating the flexibility fintechs offer in catering to varied borrower needs. Notably, 56% of loans went to borrowers with a credit bureau history of five years or more. About 59% of loans were disbursed to customers with mid-to-low risk profiles, suggesting more mature underwriting practices and prudent portfolio management. Women accounted for 16% of the total sanctioned value—a modest but encouraging sign of growing female borrower participation.
Yahoo
23-06-2025
- Business
- Yahoo
Algebrik AI Partners with TruStage™ to Offer Embedded Lending Protection Products Through the Loan Origination Journey
NEW YORK, June 23, 2025 /PRNewswire/ -- Algebrik AI, a Delaware-incorporated company headquartered in New York City, pioneering the world's first cloud-native, AI-powered, digital era Loan Origination System (LOS), today announced a partnership with TruStage™, a financially strong insurance and financial services provider. This collaboration integrates the education of a broad suite of lending protection offerings from TruStage—including GAP coverage, debt protection, credit insurance, and mechanical repair coverage—directly into Algebrik's end-to-end digital lending workflows. Making Protection Part of the Lending JourneyWith this integration, Algebrik enables credit unions and community lenders to present TruStage protection products directly within the digital loan application flow—empowering borrowers to choose coverage that fits their needs without disrupting the journey. Whether for auto loans, personal loans, or other credit products, protection options are embedded natively into Algebrik's borrower experience and remain easily configurable by loan officers. Key Benefits of the Integration Comprehensive Coverage Options – Offer GAP coverage, credit insurance, debt protection, and mechanical repair coverage products—all surfaced directly within Algebrik's LOS. Embedded at the Point of Decision – Borrowers encounter relevant protection choices within the same digital flow, with no need to redirect or re-engage later. Configurable by Loan Type & Member Segment – Institutions can tailor which TruStage products are presented based on loan type, member profile, or risk category. Simplified Operations, Centralized Reporting – Built-in tracking, configuration, and compliance support helps lenders manage enrollment, documentation, and servicing with minimal manual effort. Bringing Value to the Lending Experience "Helping credit unions deliver more than just a loan has always been core to Algebrik's vision," said Pankaj Jain, Founder & CEO of Algebrik AI. "By embedding TruStage's protection suite directly into the origination journey, we're enabling lenders to offer financial resilience and peace of mind at the exact moment it matters most—without compromising speed, simplicity, or compliance." "As we face growing economic uncertainty, 80% of consumers say they would be interested in protection plans on their next loan. Yet more than half don't recall be offered these options," said Corinn Maier, VP, Lending Payment Protection at TruStage. "By embedding Payment Protection directly into Algebrik's LOS, we can more easily give consumers and lenders greater peace of mind and financial stability." About Algebrik AIAlgebrik AI, headquartered in New York City, is the world's first cloud-native, AI-powered Loan Origination System (LOS), designed for the next generation of members. In an industry that hasn't seen significant innovation in lending technology in over 25 years, it was high time that someone stepped in to help credit unions of all sizes regain their former glory. Algebrik AI's mission is to empower credit unions to attract, engage, grow, and retain next-gen members while staying competitive in today's digital era. By transforming loan originations end-to-end, Algebrik AI takes on the heavy lifting, allowing credit unions to focus on helping the members & communities they serve. For more information, visit About TruStageTruStage™ is a financially strong insurance and financial services provider, built on the philosophy of people helping people, meeting the needs of middle-market consumers and the businesses that serve them since day one. We believe a brighter financial future should be accessible to everyone, and our products and solutions help people confidently make financial decisions that work for them at every stage of life. With a culture rooted and focused on creating a more equitable society and financial system, we are deeply committed to giving back to our communities and improving the lives of those we serve today, and tomorrow. For more information, visit For more information on how Algebrik AI is transforming lending, visit For the latest on cutting-edge lending technology & AI, follow Algebrik AI on LinkedIn at: Or chat with the Algebrik AI team at: letschat@ Contacts Media:Algebrik AIPankaj JainFounder & View original content to download multimedia: SOURCE Algebrik Error in retrieving data Sign in to access your portfolio Error in retrieving data
Mint
10-05-2025
- Business
- Mint
Mint Explainer: How RBI's new digital lending rules will impact lenders and borrowers
The Reserve Bank of India on 8 May issued consolidated 'digital lending directions' with two new sets of instructions—one for arrangements by digital lenders or lending service providers (LSPs) having multiple regulated entities (REs), and the second for those on a public directory of digital lenders. Mint breaks down that the new rules mean for lenders and borrowers. Why were the new digital lending rules issued? The central bank said that while it encourages innovation in financial systems, products, and credit delivery methods, certain concerns had emerged around the methods of designing, delivering, and servicing digital credit products, which, in turn, could affect borrowers' confidence in the digital lending ecosystem. These concerns primarily pertain to unbridled engagement of third parties, mis-selling, breach of data privacy, unfair business conduct, charging of exorbitant interest rates, and unethical recovery practices. 'To address these concerns, pursuant to the recommendations made by the 'Working Group on Digital Lending', RBI has, from time to time, issued guidelines to its regulated entities on digital lending. These Directions consolidate the earlier instructions," the banking regulator said in a statement. What is new in the guidelines? The guidelines include RBI's final instructions on 'Transparency in Aggregation of Loan Products from Multiple Lenders'. RBI issued a draft circular on 26 April 2024 and the final rules on 8 May 2025 based on comments and feedback from the public. RBI also issued guidelines regarding operationalisation of the Public Directory of Digital Lending Apps (DLAs). The creation of such a depository of registered digital lenders was announced as part of the Statement on Developmental and Regulatory Policies, which had been issued alongside the monetary policy statement on 8 August 2024. Also read | What RBI's new liquidity coverage ratio rules mean for banks 'These new guidelines hold regulated entities fully accountable for their lending service providers, mandate stringent cybersecurity measures and the localization of data within India, and empower borrowers with greater control over their personal information, including the right to revoke consent and request data deletion," said Utkarsh Bhatnagar, partner at law firm Cyril Amarchand Mangaldas. Key provisions introduce a cooling-off period for borrowers to exit loan agreements and an emphasis on direct control over loan disbursals and repayments, signalling a significant step towards a more transparent and accountable digital lending landscape, he added. What are the instructions for LSPs that have multiple lending agreements? For LSPs having agreements with multiple regulated entities for digital lending, RBI has put the onus on regulated entity partners to ensure compliance with its guidelines. Each regulated partner will need to ensure that LSPs provide a digital view of all loan offers matching a borrower's request and requirements, on their lending platform. Names of unmatched lenders also need to be disclosed in the digital view. Further, while LSPs may adopt any mechanism to match the request of borrowers with multiple loan offers, they should follow a consistent approach for 'similarly placed borrowers and products", RBI said, adding that the mechanism adopted by an LSP and any subsequent changes to this mechanism will need to be 'properly documented". 'They (LSPs) have a lot of work to do to ensure full compliance. The requirements that LSPs present information from multiple LSPs in a comparable and unbiased manner addresses a critical need, i.e., more transparency and clearer choices for borrowers," said Vijay Mani, partner, banking and capital markets leader, Deloitte India. These rules will come into effect from 1 November. Also read | What Sebi's spoofing crackdown means for the stock market How will the 'digital view' help borrowers? The 'digital view' of loan offers from matching lenders is expected to increase transparency for borrowers while also providing a level playing field to all lenders, regardless of their partnerships and size. RBI explained that the 'digital view' of a loan application must include the names of the entities extending the loan offers, the amount and tenor of loan, annual percentage rate, monthly repayment obligation, and penal charges (if applicable). This will need to be displayed in a way that enables a borrower to make a fair comparison between various offers. LSPs will also need to provide a link to the key fact statement with respect to each loan offer. cThe content displayed by the LSP shall be unbiased, objective and shall not directly/ indirectly promote or push a product of a particular RE, including the use of dark patterns/deceptive patterns designed to mislead borrowers into choosing a particular loan offer," RBI said. It added that the ranking of loan offers based on a publicly pre-disclosed metric will not be construed as promoting a particular product. Cyril Amarchand Mangaldas' Bhatnagar said such transparency is essential for promoting ethical lending practices and enhancing confidence in the digital lending ecosystem. 'The new Digital Lending Directions not only ensure that borrowers are fully aware of the terms and conditions of loans offered by different lenders, fostering accountability and reducing the risk of misrepresentation or bias in loan offerings," Bhatnagar said, 'but also support the principles of the draft co-lending regulations, which aim to streamline collaboration between lenders while safeguarding borrower interests." What is a public depository of digital lending applications? The rules for creating a public registry require regulated entities to furnish the details of all the digital lending applications that they have partnered with, through RBI's Centralised Information Management System (CIMS) platform. The platform will be available for reporting by 13 May. Regulated entities have to upload the initial data by 15 June, when the new rules come into effect. The list of digital lending apps will be available on RBI's website by 1 July. The list will get updated automatically as and when REs update the details. Also read | The official 'data fog' on India's covid toll has finally cleared up. Here's what we know now. Why is there a need for a public database of digital lending platforms? Regulated entities or partners will need to report all digital lending applications deployed or joined by them, whether their own or those of other LSPs, either exclusively or as a platform participant. This data will need to be updated as and when additional lending platforms are deployed or in case an engagement with an application ends. The automated publication of data on lending apps will empower borrowers to verify the legitimacy of lending platforms, and help curb fraud and unethical practices, experts said, adding that it will also aid in bolstering borrower protection, building trust in digital lending, and ensuring fair and responsible practices by all stakeholders. RBI said the data is being made available so customers can verify the claim of a digital lending application's association with a regulated entity. It also put the customer care onus on regulated entities, saying all issues and grievances of customers with respect to digital lending applications will need to be addressed and dealt with by a regulated entity directly. 'The public database is a measure that has been in discussion for a while and once implemented, will be an important step in curbing unauthorised or fraudulent applications," said Shilpa Mankar Ahluwalia, partner, head-fintech, Shardul Amarchand Mangaldas & Co., a law firm. 'Transparency and disclosures around multiple loan offers will enable borrowers to evaluate all options and access credit products that best suit their needs." What are the requirements for REs to maintain the depository? A regulated entity's chief compliance officer or a board-designated official will have to certify that the data submitted by the RE is correct, that the digital platforms are compliant with all regulatory instructions, and that details of the digital lending partnerships are 'suitably disclosed" on the regulated entity's website. This person will also need to certify that the digital lending platform has a link to the RE's website, where the customer can access further information about the loan products, lender, the lending service provider, particulars of customer care, link to the customer awareness 'Sachet Portal', and privacy policies, among others. Further, LSPs have to appoint a suitable nodal grievance redressal officer to deal with digital lending-related complaints and issues, and ensure that the data collection and storage by LSPs is in compliance with regulatory norms. 'REs shall ensure that the inclusion of any third party DLAs deployed by them as part of above reporting, shall not be construed by the DLAs or any associated entity as conferring any form of registration, authorization, or endorsement by RBI," the central bank said in its circular. Regulated entities will also need to ensure that such inclusion is not misrepresented in any marketing, promotional, or other materials issued by or on behalf of the digital platforms.
