Fintech personal loan disbursal doubles in 5 years, defaults drop: Report
- Financial technology companies have seen a significant increase in loan disbursal over the past five years, with personal loan volume and value surging. The average ticket size has decreased due to more small ticket loans. Loan delinquency rate was 3.6%, with West Bengal having the highest rate.
Financial Technology companies have witnessed a steady increase in loan disbursal in the [past five years, according to a report by the Fintech Association for Consumer Empowerment (FACE).
The volume of personal loans disbursed increased from 1.1 million in the first half of FY 2018-19 to 41.6 million in the same period in FY 2024.
The value of loans surged to ₹40,845 crore from ₹5,907 crore during the same period.
The average ticket size of these loans has reduced from ₹26,794 to ₹9,816 on the back of a higher volume of small ticket loans, the report added.
On loan delinquencies, the report said it constituted 3.6% of the total portfolio of the Fintech as of September 2023. The loan deliquency was 3.9% in March .2020
It must be noted that the analysis of the report was based on the 90-day loan delinquency rate.
West Bengal has the highest delinquency rate for digital loans at 4.3%, followed by Rajasthan (4%), Uttar Pradesh and Maharashtra (3.9%).
Tamil stood at the lowest spot in the 90-day delinquency rate at 3.1%.
The outreach of fintech personal loans expanded to borrowers in tier-III cities and beyond. The share of tier-III cities and beyond rose to 45% as on September 30 from 25% in March 2019.
Medium-risk and low-risk customers constitute 59% of the fintech customer base.
Further, metro cities and urban regions have lower loan default rates at 3.3% as compared to rural regions where the default rate was 4.1%, the report mentioned.
Female borrowers are less likely to default on loans at 3% compared to male borrowers at 3.7%.
Borrowers of fintech loans are majorly below 35 years. Around 49% of loan sanctions are less than ₹50,000.
The report comprised an analysis of personal loan data of 71 Fintech non-banking financial companies (NBFCs) from 2018 April to September 2023.
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First Published:22 Feb 2024, 02:40 PM IST
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