Digital lending platforms have emerged as financial industry game-changers, revolutionizing the way people access credit. These platforms offer unprecedented convenience and accessibility, helping make loans available at the click of a button.
However, as with any innovation, there are potential pitfalls that could have far-reaching consequences. One pressing issue faced by digital lenders is the negative impact of default payments.
It’s prudent for lenders to be proactive and flexible with member payment options.
Default payment impacts on digital lenders
Defaults can stem from various factors, including unforeseen financial hardships, job loss, medical emergencies or mismanagement of finances. Currently, 2.1% of people who own a credit card are behind on their payments, and it’s predicted this number will rise to 2.6% by the end of 2023.¹
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