According to a report released on Monday, fintech Non-Bank Financial Companies (NBFCs) doubled their stake in six years by sanctioning over 9 crore loans worth Rs 98,111 crore in FY24, hence contributing to India’s digital inclusion.
As per the Fintech Association for Consumer Empowerment (FACE), a prominent industry association, this represents 11% of the loan sanction value and 65% of the loan sanction volume in the overall personal loan market in FY24.
Fintech loans saw an increase in sanction volume from thirty percent to sixty-five percent and in sanction value from four percent to eleven percent between FY19 and FY24.
“Fertile ground is created by an increasing digital economy supported by infrastructure, legislation, and public policy. The environment is changing because to changes in finance, technology, legislation, and customer needs. In particular, technological advancements present new opportunities as well as threats, according to FACE CEO Sugandh Saxena.
In April 2018, the industry disbursed almost 24 crore loans worth Rs 2.7 lakh crore, notwithstanding the hurdles caused by the epidemic.
As of March 2024, there were 4.84 crore outstanding fintech personal loans with a total value of Rs 70,049 crore.
According to the FACE data, this reflects the fintech NBFC’s share of more over a third of active loan volumes and 5% of all personal loans that are currently outstanding.
As to the research, “the digital process eliminates geographical barriers to access; data indicates that fintech borrowers originate from 717 districts across 35 states/UTs.”
The majority of loans, measured by their sanction value, in FY 23–24 went to borrowers who were younger than 35.
Fintech mostly caters to the large aspirational mass market, which comprises families earning between Rs 3-12 lakh annually.
According to the report, these clients need a variety of credit products, and the fintech loan ticket size mix reflects that.
Fintech ticket sizes generally average around Rs 11,000, with tickets under Rs 50,000 accounting for half of the sanctioned value.
“Fintech’s ability to leverage technology to enhance business conduct and customer experience while mitigating risks and fraud is essential to its future success,” stated Saxena.
