What does 2022 say about the lending industry?

For the past few years, the lending industry has seen many innovations with a shift from traditional towards the digital taking of loans by Gen Xers, Millennials and Gen Zs. The population preferring to do everything online, even looking to get credits, factored into the tremendous growth and popularity of digital lending, especially in India. According to Alok Mittal, CEO of Indifi Technologies, 2022 was a fantastic year. Businesses in this sector have noticed growth. With technological advances, even ordinary people are finding it easier to navigate digital lending apps. And it is possible because digital lenders make it accessible for their borrowers.

With the more extensive internet penetration in the country, there is a 50% increase in digital adoption by the population. But, tier 2 and tier 3 cities still needed help to bridge the credit gap. That’s where fintechs tapped the opportunity and provided financial services to underpenetrated cities. From digital payments, investment, and insurance to lending, India has seen a significant rise in fintech startups. According to an EY report, the fintech sector is expected to reach USD 200 billion in revenue by 2030.

From a lending point of view, the Co-Founder of Niro, Sankalp Mathur, predicts that credit penetration will increase in 2023 to develop India economically. Digital lending fintechs with being the thriving helping hands in this with its trending financial products like co-lending model, embedded finance and many more. But how? 

2023 Fintech Lending Trends 

Let us now look at the predicted trends that will change the world of the fintech lending industry this year!

1. AI-Powered Rule Engine As A Service 

Most loan origination system providers can only determine loan eligibility based on traditional data (Bureau, Bank Statements). However, the lending environment is rapidly evolving, and we require systems that can access data from various sources, including alternative data (SMS, UPI, Amazon, Flipkart etc.). Lenders and Fintechs can configure various parameters from various sources and make decisions using Rule Engine as a Service. RaaS should also be able to adapt and reach a pattern or model.

2. Embedded Finance

By 2026, this industry is estimated to reach 136 billion USD. Even though revenue generation was difficult in 2022, companies are still working to create more integrated financial products, according to some embedded finance startups. To meet their financial needs, people will have more freedom to choose from various credit options, like BNPL, TNPL, etc. Most brands, similar to Klarna, will enter the lending market, and this industry will prosper.  

“White – Labelled Embedded finance products are the need of the hour.” 

3. Co-Lending As A Service

With technology being used, the RBI approving this model, and market acceptance, co-lending is currently at the right stage. It is what every small NBFC wants to do now.  They must make significant investments in technology to get their system and the banks’ systems in sync. Shachindra Nath, MD and Vice Chairman, U Gro Capital, says that co-lending is anticipated to  exceed INR 1,00,000 Cr in the next two years. And players like CloudBankin will play a significant role in building a platform-driven and systematic trust between Banks and small NBFCs or even bigger NBFCs and smaller NBFCs. This market will undoubtedly demand this co-lending as a service.

4. Lending Infrastructure As A Service

It begins with digital onboarding, collecting borrowers’ data from various sources, instant approval, disbursement, and repayments. To go digital, a lender is required to pull data from at least 20 different APIs. And for each API, there are at least 20 different vendors. For example, for Aadhar API, there are at least 15 vendors like PIchain, SurePass, Softpayindia, Veri5digital, etc., available in the market. Lenders must go through time-consuming tasks to go through a long list of these vendors for API integration in each lending stage, ultimately making their lending process very tech-heavy.  Thus, to solve this challenge, the market requires lending infrastructure players such as CloudBankin to provide a one-stop platform for all financial institutions’ lending needs.

5. Compliance As A Service

The 2022 RBI Regulations on digital lending have changed the industry’s outlook. Every lender is most concerned with the following:

  • “What next steps will the RBI take?”
  • “When will our company be subject to an RBI audit?”
  • “Are we having every data for an audit?”
  • “Has there ever been compliance to which we failed to comply?”
  • “Is my mobile app adhering to the Playstore’s regulations?”

Hence, this year, Fintechs and NBFCs will better withstand the constantly changing regulations when compliance is offered as a separate service.


What an unpredictable and fulfilling year 2022 has been! Fintech lending is undoubtedly the way of the future, with numerous innovations and greater financial inclusion to support India’s economy. So, keep an eye out for more of such trends in 2023 and seize the chance to grow your company and advance into a new-age fintech!

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