The Dual Edges Of Digital Unsecured Lending In India: Growth Drivers And Systemic Risks
- IJLLR Journal
- Oct 15
- 1 min read
Akshita Choudhary, Gujarat National Law University
Ishita Ghughariwala, Gujarat National Law University
Introduction & Conceptual Framework
Background & Significance:
Digital lending has become a revolutionary force in India's financial system over the last decade, fueled by regulatory push, technology, and a growing need for credit. The industry has expanded leaps and bounds, with digital disbursements rising 12 times between 2017 and 2020. By 2023, India's digital lending industry stood at $270 billion and is expected to hit $515 billion by 2030, with a growth rate of 33.5% CAGR. This expansion is being driven by innovations like embedded lending, credit scoring through AI, and the high penetration of smartphones. The unsecured business is significant in digital lending, which accounts for many extended loans. Unsecured lending provides easy access to credit for underserved segments like Tier-3 cities, with no collateral required. his segment has emerged as a cornerstone of financial inclusion, filling gaps left by conventional banking systems.
Research Objective:
This paper will attempt to find answers to the following questions:
How has digital lending changed in India's financial landscape?
What are the features and challenges of unsecured digital lending?
How do regulatory environments and technology influence this segment?
Methodology & Scope:
The study employs a mixed-method strategy using secondary data analysis of industry reports and academic research and qualitative interviews of stakeholders (Regulated Entities (REs), Digital Lending Apps (DLAs), Lending Service Providers (LSPs)). The scope is India's unsecured digital lending market from 2017 to 2025.
