Loans by fintech NBFCs accounted for a significant two-thirds of the personal loan market in volume terms and one-tenth of value in the fiscal year 2023-24, a recent report by Fintech Association for Consumer Empowerment (FACE) said.
Fintech NBFCs doubled their share in six years, accounting for 65% of the loan sanction volume and 11% of the loan sanction value in the overall personal loan market in FY23-24.
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As per the report, during FY23-24, the personal loan sanctions reached close to 14 crore, totalling Rs 9 lakh crore.
Fintech NBFCs sanctioned about 9 crore loans totalling Rs 98,111 crore, with an average ticket size slightly under Rs 11,000. Fintech loans accounted for 11 per cent of the sanction value but 65 per cent of the sanction volume, the report added.
From FY18-19 to FY23-24, fintech loans’ share in sanction volume increased from 30% to 65% and in sanction value from 4% to 11%.
As of March 2024, the outstanding loan volume for fintech personal loans was 4.84 crore with a total value of Rs 70,049 crore. This represents fintech NBFCs share of 5% in overall personal loan outstanding and over a third in active loan volumes.
Similar to the overall personal loan market, fintech personal loans have steadily grown. With scale, growth is normalising, as the growth rate for sanction volume and value in FY23-24 is half the growth rate in FY22-23.
The digital process breaks the geographical barriers to access, and the data shows that fintech borrowers come from 717 districts in 35 states/UTs.
The top 10 states account for over three-fourths, and the top five for half of the outstanding. Every third customer belongs to Tier III and beyond, the report further stated.
Notably, two-thirds of the sanction value went to the young population of less than 35 years of age and more than a third to borrowers belonging to Tier III and beyond, underscoring the pivotal role of fintechs in advancing financial inclusion.
Fintech loans are also climbing in ticket sizes, bureau vintage, and risk chain, with more than half of the sanction value coming from borrowers with ticket sizes greater than Rs 50k, bureau vintages of over 5 years, and mid-low credit risk.
