We all know about two-minute noodles, but what if I say, in two minutes get an instant personal loan? As a layman, we understand personal loan is money borrowed by anyone on interest for a reason. In addition, personal loans are generally offered by banks, credit unions, and online loan providers. In this article, we shall be focusing on personal loans particularly and how technology boosted the personal loan market as of 2023.
 Technology Changing The Personal Loan Market Statistics
The global personal loans market size valuation was $47.79 billion in 2020 and has been projected to be $719.31 billion by 2030, which means a CAGR of 31.7% from 2021 to 2030. So, it is hardly a surprise that the small ticket personal loan segment has witnessed 23X whooping growth in the past 4 years and the overall digital loans market is pegged at $350B by 2023.* Below is the graphical representation for the same.
It is quite prominent that mobile loan lending apps are on the rise as 31% of people want to get an option of apps as it would make the money borrowing procedure simple and quick.Â
Technology has changed the Personal Loan market for good and is still lingering to boost it at a pace that would have been difficult to fathom. Also, personal loans have lower interest rates as compared to credit cards. They therefore can be used to consolidate multiple credit card debts into a single and lower-cost monthly payment.
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 Digital Loan Journey Experience:
The game-changer undoubtedly has been technology to change the perspective of the personal loan market off-lately. The borrowers’ ability to experience the entire loan journey from origination to repayment at their fingertips has been mesmerizing in the last couple of years which we can easily witness in the statistical numbers. The explosive growth and democratization of AI/ML technology have ensured the core functions of credit underwriting and risk management functions are more efficient. Also, the digital onboarding (e-KYC), and reference information checks including digital verification and validation of structure (like OCR / ICR ) on bank statements, and open API architecture (identity verification). Finally, digital payments (UPI / Wallets) for disbursements, and repayments are being embraced via digital technology.
 Non-binary / Risk-Based Approach
The robust digital underwriting tech has shifted the paradigm of a binary qualification mechanism for personal loan borrowers and fixed price approach to a more broad spectrum of borrowers and yet manageable collection scenarios and an ability to embrace first-degree pricing based on a risk-based approach.
 ‘Personal’ About Personal Loans
Technology has enabled product customization with unique product placements and personalization at scale. Below is the graphical representation of the personal loan market segment from 2017-2024(expected).
 Digital Infrastructure:
India has been able to make a commendable journey to bridge the digital divide in terms of core infrastructure (viz. connectivity) to enable ecosystems (viz. Payments / UPI). This journey has therefore created the apt foundation for bridging the credit divide and for delivering the assets of credits and value-added services through these digital pipelines.
 Device Penetration:
This is fully integrated into consumer finance, especially in Personal Loans business reach, and seamless touchpoints form critical aspects of market creation. The two primary dimensions are accessibility (mobile phones, digital literacy, adoption) and availability i.e., the multiplicity of digital channels, devices, and platforms be it mobile phones, the web, or, even Omni channels or physical models.
The Cognitive Future Is Here – Safer And Faster
DLT commonly known as Blockchain or Cryptographic originations presents disruptive opportunities in fraud detection. Also, the advent of digital currency as a legitimate legal tender presents the opportunity to fasten and reduce lending costs and enhances transparency multifold. The evolution of the financial services ecosystem like Account Aggregation has made the onboarding verification process seamless and cost-effective. Moreover, the advancement and proliferation of Natural Language Processing (NLP) mean personal loan offerings on digital apps breaking barriers of lack of digital workflow affinity, languages, and competency levels of technical and financial literacy through experiences of vernacular voice, data, and cognitive chatbot solutions.
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