With a paradigm shift in the Indian banking landscape over the past decade, the lending ecosystem has undergone a transformative change.

The personal loan segment, in particular, has been at the forefront of this significant phenomenon. According to a Report from CARE Ratings, the personal loan segment has witnessed a robust 20.4% YoY growth in February 2023.

A nation with the largest young population and a growing middle class, India has seen a spike in the demand for personal loans.

According to a TransUnion CIBIL Report, younger consumers are driving robust credit growth with a 43% share in demand, a 3% increase in Q4 2022 compared to the same period in 2021.

Young Consumers between the ages of 18 and 30 are contributing to an increase in credit penetration in India, accounting for 15% in Dec ‘22.

Hassle-free loan applications with minimal documentation, quick approval and disbursal of loans, attractive interest rates, and flexible repayment are some of the major factors leading to the increasing popularity of personal loans.

As credit growth continues despite a significant rise in interest rates, banks and NBFCs are competing neck-to-neck to cater to this growing demand, leaving consumers with a wide range of options.

Digital technology has been a prime enabler of this shift. Mobile apps and web platforms have made it extremely easy for consumers to have immediate access to funds.

With this easy availability comes the challenge of attracting borrowers to opt for a brand and engaging them on the digital platform through their repayment journey, which, if done right, can create opportunities for lenders to upsell and cross-sell.

In this blog, let’s identify ways to engage borrowers effectively on personal loan apps.

Top 5 Effective Engagement Strategies on Personal Loan Apps

1. Targeted Communication for Different Borrower Segments

Successful conversion is always driven by precise communication targeted at a specific user segment. For example,

Potential borrowers who have downloaded the app but haven’t signed up. At this stage, reinforcing the brand’s USP is crucial. Push Notifications can be used as an effective channel to communicate with the USPs, and they can bring users back to the app to complete the next steps.

Or, create a cohort of users who have signed up with the app but have not shared the PAN and ID Proof. The brand can leverage SMS/WhatsApp/Email channels along with Push Notifications for this user segment to convey social proof messages.

For both of these groups, understanding their need and why they are not proceeding with the brand is key here. Nothing can be better than hearing it from borrowers directly through a survey.

2. Trust Plays a Key Role

Gaining borrowers’ trust and confidence in the shortest time is critical for a personal loan app. The brand’s communication should be centered around building trust, especially until the time they opt for the loan.

For example, how many people have taken a personal loan already, what is the total amount of loan disbursed so far, what is the geographic spread of the company, etc., can be shared with users to gain their trust. Push Notifications with a GIF containing such important metrics can bring users back to the app. In-app nudge formats like a slide show can also be presented to users.

Customer testimonials will boost borrowers’ confidence to a great degree. A video clip or a carousel containing customers’ experience of how the company safely handled their documents or how hassle-free it was to get the loan can influence users positively to make decisions in the lender’s favor.

3. Nurturing Responsible Behavior Among Borrowers

Once potential borrowers convert and take a loan, repayment becomes the most pivotal activity on the lending app.

Educating users on making consistent EMI payments on the due date should be carried out at regular intervals. Also, the consequences of an EMI bounce, such as its negative impact on a borrower’s credit score, late payment charges, or increased interest rates, should be asserted by the lender.

Guiding them on how they can avoid missing out on an EMI, like creating an emergency fund to tackle unforeseen financial mishaps or communicating with lenders beforehand in case of apprehending an EMI miss, can help create diligent repayment behavior among borrowers.

Lenders can leverage communication channels like In-App Messages, Push Notifications, Email, and WhatsApp to communicate these important aspects effectively.

4. Assisting Users to Achieve a Larger Goal- Personal Finance Management

Responsible repayment behavior is a manifestation of a well-balanced financial plan.

A real engagement and a long-term relationship with borrowers can be established through guiding them on personal finance management. For example, educate users on the importance of setting up goals (short-term and long-term), having a budget in place, 50-30-20 rules, etc.

Knowledge about borrowers’ financial goals and investment preferences helps lenders build progressive profiles of their customers and personalize their communication. It also enables brands to cross-sell and up-sell at appropriate times in the user journey.

As India witnesses a rise in the young credit-active population, it becomes imperative for fintech companies to segment that group of borrowers and communicate with relevant content that inculcates financial discipline in them and strengthens their financial stability.

Helping users be responsible in managing their finances is of utmost importance for a positive borrower-lender interaction in the long term.

5. Finance Made Easy and Fun with Gamification

Undoubtedly, subjects like credit or personal finance are serious, and influencing people to imbibe good financial habits can be challenging at times. Gamification can equip lenders with much-needed tools to help users adapt to it gradually.

Quiz: Create awareness about personal finance concepts, best practices, and industry updates by making them participate in a quiz.

Opinion poll: Take polls on the best investment instrument, ways to manage finance, etc. Group users based on their responses and further engage them with content that matches their preferences.

Streak: App teams can create monthly streaks of EMI payments. For example. if customers make repayment on the due date for consecutive 3 or 6 months without a break, they will be awarded a badge or rewards.

Conclusion

The world of personal loans in India has changed a lot recently, especially thanks to new technology and a younger generation looking for quick and easy ways to borrow money. With apps and online platforms, getting a loan has never been easier. But for companies offering these loans, the challenge is to make sure they are grabbing the attention of potential borrowers and guiding them properly once they have signed up.

From sending timely notifications and building trust to educating people with quizzes and rewards on managing their money responsibly, it's all about keeping the customer engaged. All of this helps companies not just to give out loans but also to help people be smarter about their money.

So, for those looking to borrow or lend, the options are many, and the convenience is high. It's a win-win for everyone as the personal loan market continues to grow.

How can we help? Join the Revolution!

Upshot.ai is a powerful platform that provides advanced tools and features to help you re-engage mobile app users effectively. With its comprehensive analytics and user engagement capabilities, Upshot.ai enables you to track user behavior, analyze user events, and create personalized re-engagement campaigns.

With our robust analytics and customer engagement platform, you can easily:

Send Personalized Push Notifications and In-App Messages: Use our intuitive dashboard and User Engagement Platform to craft compelling, personalized messages that users can't ignore.

Implement Gamification: Inject fun into your app without having to code from scratch. Upshot.ai's Gamification Engine makes it a breeze.

Analyze User Behavior: Gain insights into what's making your users tick and what's ticking them off. Use Upshot.ai’s Analytics Tool to refine your re-engagement strategies further.

Automate Email Campaigns: Our platform seamlessly integrates with email providers, making setting up email drip campaigns as easy as pie.

Easy-to-use Loyalty Programs: Implement loyalty programs in just a few clicks to keep your users coming back for more.

Start your journey to unstoppable user engagement today with Upshot.ai. To learn more about how Upshot.ai can help you re-engage mobile app users and increase user retention, book a demo, and let’s get started! 🚀

Engaging Users on Personal Loan Apps in India

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