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India’s digital lending market worth $270 bln in 2022, disbursement grew by 11% 

FinTechs in India have nurtured niche customer segments and witnessed  rapid growth over the last decade. To support this growth there has been a rapid evolution of regulatory frameworks as well, like a 40 percent drop in manual KYC compared to digital KYC, 85 percent reduction in costs with adoption of e-KYC, and much more. With emerging digital lending companies in India, the country witnessed a growth of CAGR 39.5 percent over a  span of 10 years. India’s digital lending market was worth USD 270 billion in 2022 and is expected to reach USD 350 billion by 2023, highlighted a report by Experian.  Additionally, disbursement in the Indian lending market witnessed a growth of 11 percent and reached Rs 174 trillion in FY22, compared to Rs 11.4 trillion in FY17, with a record growth of CAGR 72 percent. The disbursement is further expected to grow and reach Rs 274 trillion in FY26 registering a growth of CAGR 12 percent, revealed a report by Praxis Global Alliance. While digital lending is on the rise and an increasing number of FinTechs are entering the credit market, it is also tapping many risks going forward. The Reserve Bank of India had also recently flagged concerns on the mushrooming of digital lending apps, pointing to the need for regulated entities to increase oversight. It had come out with digital lending guidelines to protect customers data and reduce the increasing number of frauds in the system.

Mobile internet usage by age and gender

What Indians aged 18-24 consume on the internet on their mobile phones bears little resemblance to that of people who are over 25. Even as the 25+ category is mostly happy with the good old stalwarts such as WhatsApp, Facebook, and Amazon, for Generation Z, it is Telegram and Flipkart. The divide is so huge that data from data.ai shows that there is not a single app that straddles both groups. Figures based on the top apps of 2022 for 18-24 year olds show that in terms of Monthly Active Users (MAU), at number one is Instagram, followed by Truecaller, Flipkart, content streaming site MX Player, and Telegram. The list of top apps for the over 25s is different. Top is WhatsApp, followed by Facebook, PhonePe, Amazon, and Facebook Messenger. Facebook does not even feature on the top five apps for generation Z. Even shopping is divided with the older lot choosing Amazon and zoomers preferring Flipkart. The MAU data for 18-24 year olds shows a commonality in choice with other markets. For example, Instagram is the top in 11 of the 15 markets for which data is available and this includes the US, the UK, Germany, Italy, Hong Kong, Taiwan, and France. The ban on TikTok in India has led to a difference in the pecking order for Gen Z. It features among the top five apps in 13 countries (except Hong Kong and India). In the US and some other countries, it comes in at number two.

Google mobile apps unbundling to start

Google is working with mobile device OEMs (original equipment manufacturers) to unbundle the distribution of Play Store, which is currently linked to OEMs having to mandatorily pre-install a suite of around nine leading apps. Its implementation is expected to happen immediately after Google informs and discusses with the Competition Commission of India (CCI) its plan to comply with the antitrust body’s order. If not, it can go back to the Supreme Court to ask for more time. The unbundling plan by Google is much more comprehensive than it suggested earlier during the Supreme Court hearing. It had told the court that it would unbundle Google Search and Google Chrome from Google Play and Google Chrome from Google Search. However, based on OEM discussions, Google is expected to tell the CCI that it will require more time to implement other parts of the CCI order, such as allowing rival app stores to sit inside Google Play Store (known as sideloading).

Lupin Digital launches Lyfe, a 24×7 monitoring ecosystem for heart patients

Lupin Digital Health, a wholly-owned subsidiary of drug major Lupin, has launched its digital therapeutics solution Lyfe for cardiac patients in India as it aims to go beyond the pill and provide a support ecosystem for patients. The company aims to have one million users on-board Lyfe as it expands its offerings to include heart failure patients, hypertensive patients etc. It is starting with acute coronary syndrome patients who have either recovered from a cardiac event, undergone an angioplasty or are at high risk of a cardiac event. Designed by Indian cardiologists, Lyfe helps patients improve heart health through doctor-connected online and offline modules. FDA- and CE-approved wearable devices record vital parameters and notify caregivers and doctors about off-range vitals and emergencies. This is a subscription-based programme starting at Rs 500 a month and going up to Rs 20,000 a year, depending on the kind of device the patient needs.

Budget to bring tax clarity for offshore digital businesses

The government plans to amend the GST law to clarify the Integrated Goods and Services Tax (IGST) liability for offshore digital businesses offering services such as online advertising, games, and cloud services to Indian users. The idea is to amend the IGST Act through the finance bill to redefine what constitutes Online Information Database Access and Retrieval (OIDAR) that is liable to 18% IGST when availed by a customer in India from offshore suppliers. Separately, the government also proposes to redefine who is a ‘non-taxable’ online recipient of such services to fix the onus of tax payment on the offshore seller in some instances.

ASCI issues new disclaimer norms for TV, digital ads

The Advertising Standards Council of India (ASCI) has tightened guidelines for disclaimers made in advertisements. The self-regulatory industry body said that the use of disclaimers should be kept at a minimum, clearly readable and remain on screen for more than four seconds in TV or video ads. According to the ASCI code, suitable disclaimers should be used to explain and support claims made in advertisements by brands. ASCI also outlined guidelines on how they need to be displayed.  In the past three years, ASCI found nearly 800 ads to be in violation of its disclaimer guidelines. It has, therefore, made additions to existing guidelines. “The use of disclaimer should be kept to a minimum. Long or otherwise complex disclaimers with large blocks of text and difficult words are a deterrent to viewers attempting to read the contents of the disclaimer. In such cases advertisers should modify the headline claim to reduce the need for further qualification through disclaimers,” it added. It said brands should ensure disclaimers in TV ads and video commercials on digital media are clearly readable to consumers. “In a single frame in an ad there should not be more than one disclaimer. It should be restricted to full length lines and every line should remain on screen for more than four seconds,” the self-regulatory industry body added.

Millennials at forefront of online finance products, contribute 44% of total lending

The annual consumer study – How India Borrows (HIB) 2022 – by Home Credit India, a local arm of the global consumer finance provider, concludes that more than 50% of the borrowers surveyed show preference and acceptability for EMI Cards when it comes to shopping or for any credit need. Overall, more than three-fourth of the borrowers led by Tier 1 and 2 cities, and Gen Z/millennials are optimistic and buoyant about digital lending services, owing to rising popularity of online loans, convenience experienced, and faster adoption of digital lending. According to a recent study by neobanking platform Freo, in 2022, millennials continue to constitute a majority when it comes to availing of lending products, contributing to 44% of the total transactions. The share of smaller loan ticket sizes has also increased compared to the previous years by 10% in terms of volume.  When it comes to credit, over 33% of total transactions came from the age group of 18-25, the study revealed. This is a strong indication of the fact that millennials are not afraid to take loans to meet their short term and long term goals, noted the study. millennials are truly redefining both the  lending and payments categories in India.  Being digital natives, they are always at ease with  innovations, are avid users of mobile applications, and prefer getting things done from the comfort of their home. “One of our key observations has been the shift in mindset and growing comfort towards availing digital credit and using digital payments to achieve both short term and long term goals,” Anuj Kacker, Co-Founder, Freo, said in a company statement.

Musk says higher priced Twitter subscription won’t carry ads

Twitter owner Elon Musk tweeted on January 21 that a higher priced subscription of the social media platform will not carry advertisements. The billionaire also said that ads are “too frequent on Twitter and too big,” and that steps will be taken to address those issues in coming weeks. Twitter earns nearly 90% of its revenue from selling digital ads and Mr. Musk recently attributed a “massive drop in revenue” to rights organizations that have pressured brands to pause their Twitter ads. Earlier in December, Musk announced that Twitter’s basic Blue tick will have half the number of advertisements and it will offer a higher tier with no advertisements in 2023.

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