Digital lenders move from scaling credit to managing debt

By Vriti Gothi

As digital lending platforms reach scale, FinTech companies are beginning to pivot away from aggressive loan origination toward services that help borrowers manage, restructure and optimise existing debt. The shift reflects a maturing market in which access to instant credit is no longer a differentiator, and consumer expectations are increasingly shaped by affordability, repayment flexibility and long-term financial stability.

Over the past five years, rapid advances in artificial intelligence, alternative data analytics and fraud detection have transformed underwriting processes. Lenders can now assess risk more accurately, approve loans in minutes and reach customers across income segments through mobile-first platforms. This has resulted in a crowded consumer lending landscape, particularly in personal loans, buy now, pay later (BNPL) products and short-term credit.

However, as digital credit becomes ubiquitous, borrowers are facing a new challenge: managing multiple loans across apps, each with different interest rates, tenures and repayment cycles. Industry observers note that this fragmentation is contributing to repayment stress, even among creditworthy users, and is prompting a reassessment of how FinTech platforms define value.

Rather than issuing additional loans, a growing number of FinTechs are exploring models centred on refinancing, consolidation and structured repayment solutions. These offerings aim to reduce the total cost of borrowing by bundling multiple liabilities into a single loan, extending repayment timelines or optimising interest rates based on improved credit profiles. The approach also aligns with rising regulatory scrutiny around over-lending and consumer protection.

Rohith Vedira, Co-Founder of SathPay, said, “The market is undergoing a fundamental shift in borrower expectations. There are now plenty of apps offering instant, frictionless digital loans. Underwriting has never been stronger, thanks to AI, alternative risk analytics, and better fraud controls. So the consumer’s expectation has shifted they already have access to quick credit. What they now compare are the terms: who gives them the lowest cost, the simplest repayment, and the most breathing room. That’s why restructuring and consolidating loans will become the next big wave in FinTech. The real opportunity isn’t in issuing more loans; it’s in helping people manage and optimise the debt they already have.”

From a strategic standpoint, debt optimisation platforms offer FinTechs a path to deeper customer engagement and more predictable revenue streams. By focusing on the lifecycle of credit rather than just acquisition, providers can build longer-term relationships while reducing default risk. For lenders, improved repayment outcomes also translate into healthier balance sheets and lower collection costs.

The trend is particularly relevant in emerging markets, where first-time borrowers often accumulate multiple small-ticket loans before fully understanding their repayment obligations. Tools that provide visibility, consolidation and structured repayment plans could play a role in improving overall credit discipline.

As the FinTech sector enters a more measured growth phase, the emphasis on responsible credit management is likely to intensify. Platforms that combine data-driven underwriting with borrower-centric debt solutions may be better positioned to navigate regulatory expectations, evolving consumer behaviour and the industry’s broader transition from scale to sustainability.