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Financial Technology (Fintech) companies have seen a steady rise in loan distribution over the past five years. This information comes from a report by the Fintech Association for Consumer Empowerment (FACE).
Increase in Loan Disbursal Volume
- Personal loan distribution has increased significantly.
- In the first half of the fiscal year (FY) 2018-19, 1.1 million loans were given out.
- By the same period in FY 2024, this number rose to 41.6 million loans.
Growth in Loan Value
- The total value of loans surged from ₹5,907 crore to ₹40,845 crore during this period.
Changes in Average Loan Size
- The average loan size decreased from ₹26,794 to ₹9,816.
- This reduction is due to more small-sized loans being distributed.
Loan Delinquency Rates
- Loan delinquency, which means late or missed payments, stood at 3.6% of the total portfolio as of September 2023.
- In March 2020, this rate was 3.9%.
- Analysis was based on a 90-day delinquency rate.
Regional Delinquency Rates
- West Bengal has the highest delinquency rate for digital loans at 4.3%, followed by Rajasthan (4%), Uttar Pradesh, and Maharashtra (3.9%).
- Tamil Nadu has the lowest rate at 3.1%.
Expansion to Tier-III Cities and Beyond
- Fintech personal loans are now reaching borrowers in smaller cities.
- The share of tier-III cities and beyond in loan distribution rose to 45% by September 30 from 25% in March 2019.
Customer Base and Risk Analysis
- Medium-risk and low-risk customers make up 59% of the fintech customer base.
Loan Default Rates Across Regions
- Metro cities and urban areas have lower loan default rates at 3.3% compared to rural regions at 4.1%.
Gender and Age Analysis
- Female borrowers are less likely to default on loans (3%) compared to male borrowers (3.7%).
- Majority of fintech loan borrowers are below 35 years old.
- Around 49% of loan sanctions are less than ₹50,000.
Data Analysis Details
- The report analyzed personal loan data from 71 Fintech non-banking financial companies (NBFCs) from April 2018 to September 2023.
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