Instant digital loans: convenience comes with a heavy cost

After a crackdown on predatory Chinese loan apps, established local players like Paytm have entered the market for short-term loans—but with annualized rates as high as 50-60%.

India’s digital lending industry is at a crossroads.

Last year in August, the Reserve Bank of India introduced its digital lending guidelines with an intention to clean up in an industry plagued with illicit loan apps—mostly operated by Chinese entities—issuing credit at obscenely high interest rates and practicing predatory collection tactics. 

The RBI’s new rules and the subsequent purging of these illegal apps from Google’s Play Store have meant that there is a void in the market for products delivering short-tenured personal loans with minimum paperwork. This market or borrowers, typically dominated by newly salaried individuals and blue collar workers, …


Ashwin Manikandan

Ashwin covered fintech and banking at The Morning Context. Previously, he was at The Economic Times, where he worked across the finance, tech and startup verticals, breaking stories related to India’s banking system, startups in the new economy, digital payments, insurance and cryptocurrencies.