DIGITAL CREDIT REVOLUTION: A STUDY ON THE INFLUENCE OF DIGITAL LENDING PLATFORMS ON CONSUMER BORROWING BEHAVIOUR

Abstract

Digital lending platforms have transformed the financial services sector by providing consumers with quick, convenient, and technology-driven access to credit. The integration of financial technology (FinTech) into lending services has simplified the borrowing process through paperless documentation, instant loan approvals, and mobile-based applications. Despite these advantages, concerns regarding financial literacy, digital security, transparency, and responsible borrowing continue to influence consumers' adoption and borrowing behaviour. The present study, titled "An Examination of the Influence of Digital Lending Platforms on the Borrowing Behaviour of Consumers in Thoothukudi District," aims to analyse consumers' awareness of digital lending platforms, their usage patterns, borrowing behaviour, and the challenges associated with digital lending services. The study adopted a descriptive research design based on both primary and secondary data. Primary data were collected through a structured questionnaire from 325 respondents using the convenience sampling technique. The collected data were analysed using Percentage Analysis, Independent Sample t-test, One-Way ANOVA, Mann–Whitney U Test, and other appropriate statistical tools with the support of SPSS software. The findings reveal that consumers possess a moderate to high level of awareness regarding digital lending platforms, their services, eligibility criteria, and regulatory guidelines. The study found that age significantly influences consumers' awareness of digital lending platforms, while gender has only a limited influence on the usage of digital lending services, with a significant difference observed only in respondents' preference for paperless loan processing. Further, occupation significantly influences selected dimensions of borrowing behaviour, particularly borrowing frequency, access to financial services, evaluation of repayment capacity, and borrowing based on financial necessity. The results also indicate that digital lending platforms have enhanced financial accessibility and convenience; however, concerns relating to digital security, financial literacy, responsible borrowing, and regulatory awareness continue to affect consumers' borrowing decisions. The study concludes that digital lending platforms play a vital role in promoting financial inclusion by providing faster, more accessible, and customer-friendly lending services. However, strengthening consumer awareness, improving digital financial literacy, enhancing transparency in lending practices, ensuring compliance with RBI regulations, and reinforcing cybersecurity measures are essential for encouraging responsible borrowing behaviour and building long-term consumer confidence. The findings provide valuable implications for financial institutions, FinTech companies, policymakers, regulators, and researchers in developing effective strategies to promote sustainable and responsible digital lending practices in India.