Fintech personal loans log 62% of sanction volumes in FY24 1st half in India: Report
The Fintech personal loans in India have seen substantial growth, accounting for a third of active personal loans in September 2023, with 62 per cent of sanction volumes in the first half of the current fiscal year. The borrowers are primarily younger, with two-thirds falling in the age bracket of less than 35 years. According to a report by the Fintech Association for Consumer Empowerment (FACE), Fintech personal loans have played a significant role in financial inclusion, sanctioning over Rs 2 lakh crore since April 2018.
The CEO of FACE, Sugandh Saxena, emphasized the vital role of Fintechs in furthering financial inclusion as the digital economy continues to expand and shape the financial landscape. The report analyzed data from 71 Fintech NBFCs from April 2018 to September 2023, revealing the consistent increase in the share of Fintech loans in the personal loan market over the years.
While Fintech NBFCs account for just 5 per cent of total personal loans outstanding as of September 2023, they represent over a third of active loan volumes. The report also highlighted the increasing share of mid-low risk borrowers, from 36 per cent in FY 18-19 to 59 per cent in H1 FY 23-24, indicating a shift in the risk chain and distribution of sanctioned value across credit scores.
Furthermore, Fintech loans are climbing in ticket sizes, with nearly half of the sanction value coming from borrowers with ticket sizes exceeding Rs 50,000. This trend demonstrates the expanding reach and impact of Fintech loans in serving underserved segments with small-value loans.
The growth of Fintech personal loans reflects the evolving financial landscape and the increasing role of digital lenders in providing access to formal credit, especially for younger borrowers. As the digital economy continues to shape up, Fintechs are expected to play a pivotal role in addressing the financial needs of customers and promoting their financial health and resilience.
In conclusion, the rapid growth of Fintech personal loans in India signifies the expanding opportunities and responsibilities for digital lenders in serving diverse market segments and contributing to financial inclusion. The continued evolution of Fintech loans will undoubtedly have a significant impact on the accessibility of formal credit for borrowers across the country.
