New Delhi, Sep 2 (IANS) India’s next home-loan growth wave is expected from smaller cities as digital lending gathers pace with 92 per cent of housing-finance applications processed digitally by 2024, a report said on Wednesday.
The report from advisory firm SGA PR said nearly 42 per cent of housing finance firms now see the majority of enquiries coming digitally.
Tier 2 and Tier 3 cities account for 64 per cent of home-loan volumes, with volumes growing 81 per cent YoY in 2025
Only 60 per cent of housing-finance applications were processed digitally in 2020, the firm said, underlining the rapid scale of digital penetration.
The report highlighted that housing finance remains less digitised than unsecured lending, with physical verification, field operations and manual processes continuing to play an important role.
Rising incomes, infrastructure development, urbanisation, employment creation and the affordability gap in major metros are contributing to the growing importance of smaller cities and towns in India’s housing demand.
“As demand moves beyond the metros, technology can help lenders address some of the friction around discovery, documentation and underwriting. The next phase will require a combination of digital infrastructure and the trust and local understanding that remain important in housing finance,” said Rahul Jain, CEO, SGA PR.
Amit Prakash Singh, Co-Founder & Chief Business Officer, Urban Money, mentioned that digital tools are making it easier to assess eligibility, match borrowers with lenders and streamline documentation.
“As housing demand expands across smaller cities and reaches more first-time and self-employed borrowers, the real opportunity lies in combining digital infrastructure with strong advisory and on-ground support to make formal credit more accessible and transparent,” Singh added.
The report forecasted the next phase of housing finance to be shaped by affordable housing, smaller-city demand, digital sourcing, Account Aggregator-led underwriting and increasingly data-driven credit assessment.
The firm predicted digital sourcing to cross 70 per cent by 2030, while AI-driven underwriting could become increasingly standard across the lending journey.
—IANS
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