Tue Sep 17 06:47:13 UTC 2024: ## Account Aggregator Framework Drives ₹42,300 Crore in Loans
**New Delhi:** The Account Aggregator (AA) framework, a system designed to facilitate secure and consent-based data sharing between financial institutions, has enabled lending firms to disburse ₹42,300 crore in loans since its launch in September 2021, according to a report by Sahamati, an industry alliance for the AA ecosystem.
The report, “Lending facilitated by Account Aggregators,” reveals that the average loan ticket size during the period was ₹1,00,237. The second half of Fiscal Year 2024 (October-March) witnessed a significant surge in loan disbursements, with AAs facilitating ₹22,100 crore through 21.2 lakh loans. The average loan ticket size during this period stood at ₹1,04,245, with experts anticipating a decline as the framework expands to cater to smaller loans for MSMEs and unsecured loans for new-to-credit customers.
Sahamati, representing data from nine leading Financial Information Users (FIUs), which account for 60% of consent fulfillment in H2 FY24, highlighted the positive impact of the AA framework on the lending sector. The actual numbers are likely to be significantly higher when extrapolated for the entire ecosystem.
The AA framework functions as a non-bank financial company (NBFC) that retrieves and collects financial information pertaining to customers only with their explicit consent. It facilitates data transfer from one financial institution to another based on individual instructions, ensuring complete control over their personal information.
As of August 24, 2023, the AA system boasted 163 Financial Information Providers, including banks, insurance firms, mutual funds, depositories, pension funds, and tax/GST authorities. This allows individuals to access and share their financial data securely through AA apps or web pages, empowering them to utilize it for their benefit or for financial information users.
B.G. Mahesh, CEO of Sahamati, emphasized the continuous growth of the AA framework, citing a 15% monthly increase in cumulative consent requests. This signifies a growing number of individuals taking control of their data and leveraging it for accessing financial services.
Lending firms have been early adopters of the AA framework due to its authenticity and ease of use, resulting in improved operational efficiencies and a significant reduction in fraud cases related to tampered documentation.
Sahamati is actively working on establishing Fair Use templates to define limits on data usage and developing technology infrastructure to monitor and enforce adherence to these templates programmatically. These measures aim to prevent data misuse and position the AA ecosystem as a crucial tool for strengthening the financial sector against fraud, creating a safer environment for both institutions and consumers.
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