Lenders used Account Aggregator Framework to facilitate loans: Sahamati
Lending firms have used Account Aggregator Framework to facilitate loans worth ₹42,300 crores since September 2021 till March 2024, with cumulative average loan ticket size at ₹1,00,237 for the same period, according to report by Sahamati, which is an industry alliance for the Account Aggregator (AA) ecosystem.
The growth in facilitating loans is indicated by the number of loans disbursed at 21.2 lakhs with ₹22,100 crores in disbursements facilitated by AAs in H2 (October-March) FY24, per the report ‘Lending facilitated by Account Aggregators’.
“Average loan ticket size in the H2FY24 period stood at ₹1,04,245 and is expected to reduce as we expect more cash- flow based lending to MSMEs and unsecured loans to new to credit customers,” it said.
Sahamati, in a statement, said the aforementioned numbers represent the data submitted by nine top-performing Financial Information users (FIUs), representing about 60 per cent of consents fulfilled for H2 FY24. The numbers, if extrapolated for the ecosystem, are much higher.
An Account Aggregator (AA) is a Non-Bank Finance Company (NBFC) engaged in the business of providing the service of retrieving or collecting financial information pertaining to the customer.
No financial information of the customer is retrieved, shared or transferred by AA framework without the explicit consent of the customer. AA transfers data from one financial institution to another based on an individual’s instruction and consent. Registering with an AA is fully voluntary for consumers.
As of August 24, there were 163 Financial Information Providers on the AA system, including Banks, Insurance Firms, Mutual Funds, Depositories and Pension Funds and Tax/GST, Sahamati said.
“Individuals can now access or share machine readable, tamper-proof data from these sources, through their AA apps or web pages for self use or for financial information users (FIUs). The explicit, informed consent-based system, in turn, gives them control over their own data,” the industry AA alliance said.
B.G.Mahesh, CEO, Sahamati, “We have seen a steady 15 per cent monthly growth in the number of cumulative consent requests being fulfilled on the AA framework. Each consent request represents the fact that more and more individuals are now in control of their data and are using it for accessing financial services.”
He observed that lending firms have been the first few players who have adopted the AA framework for their on-going business.
The authenticity of data on AA framework, along with the ease of use, results in higher operational efficiencies and a high reduction in fraud cases through tampered documentations.
Sahamati said it is working on defining Fair use templates that set limits on data usage and is also developing the technology infrastructure to detect and enforce adherence to these templates programmatically.
These measures aim to reduce data misuse, positioning the AA ecosystem to strengthen the financial sector against fraud and misuse, creating a safer environment for institutions and consumers, it added.