Fintech apps have issued over Rs. 2 Lac crore Personal Loans, Check Details here

Fintech companies have been steadily increasing their lending in personal loans since April 2018. According to a report by the Fintech Association for Consumer Empowerment (FACE), these lenders have issued over 2-lakh crore loans by September 2023.

Fintechs’ Share in Personal Loans

• Fintechs made up a significant portion of active personal loans, comprising one-third by September 2023.
• In the first half of FY24, they were responsible for 62% of loan sanctions, indicating their growing influence.

Market Share Growth

• Fintechs have doubled their market share in personal loan sanctions since FY19.
• The number of loans and their value has seen significant growth from H1 FY19 to H1 FY24.

Loan Distribution and Characteristics

• Fintech NBFCs’ share in total outstanding personal loans is 5%, but they account for over a third of active loan volumes.
• Loans are increasingly going to borrowers with longer credit histories and moderate to low risk.
• Most borrowers have bureau records of over 3 years, and half of them have records of over 5 years.
• Mid-low risk borrowers have seen an increase in share from 36% in FY19 to 59% in H1 FY24.
• Majority of borrowers are under 35 years old.

Loan Characteristics by Ticket Size

• Average loan size is around ₹10,000, with higher values in metro urban areas.
• Larger loan sizes are associated with older borrowers, longer credit histories, and better credit scores.

Role in Financial Inclusion

• Despite their smaller size in terms of loan value, fintechs are crucial for expanding financial inclusion.
• Their role is expected to grow further as the digital economy expands.

Regional Distribution

• Top 10 states account for the majority of outstanding loan value, with the top 5 states contributing over half.
• Loans are dispersed across 721 districts in 35 States/UTs, with 108 districts having over ₹100 crore in outstanding value.

Expansion into Tier-III Cities

• In H1 FY24, more than a third of loan value went to borrowers in Tier-III cities and beyond.
• These cities have witnessed a significant increase in their share of loan value since FY19.