Did you know the approval rates of Digital lending apps?
I spoke and worked with a lot of digital lending companies.
One thing which I notice in common is
1) The approval rates are less than 5-8%
2) which means if you see 100,000 downloads in the Play Store, then they have given a loan to less than 8K people.
Approval rates are less because of the following reasons:
1) The bureau score is not good.
2) the customer is not in the serviceable area: Lenders will not give loans to pincodes which don’t have a collection team.
3) NTC customers
4) Other reasons like FOIR not matching after checking banking statements.
Recently, More than 600 Legitimate apps have been identified by RBI.
Now think about 92% which are NOT served by these lending apps.
This segment itself is a huge market.
What do you think?