How has COVID affected Digital Lending in India?
Most businesses around the globe are suffering significantly in the aftermath of Covid-19, however, a few sectors have had a disproportionate impact, out of which lending is one. For the lending sector and for fintech lending specifically, with several fintech start-ups folding-up, the adverse impact is expected to last for a few years. Since the current events are unprecedented, assessing future cash flows of individuals and businesses will not be easy and short-term loans will pose significant risk. Loan demand will rise with loss of revenues for businesses and job loss for individuals, hence, the main issue for the sector will be how to underwrite the leads in an effective manner. Collections, including capital deployed and interests accrued, will be under tremendous pressure which in turn will severely reduce cash flows, leading to very less or no money to pay salaries, bills or make new loan disbursements. People who have lost earning opportunities, including contract workers, oth