Fintech lending volume doubles to ₹18,000 crore in FY22: Report

Financial technology or fintech lending companies doubled disbursements in the financial year 2021-22, giving a total of 2.66 crore loans worth ₹18,000 crore, according to a report by Fintech Association for Consumer Empowerment (FACE).

FACE, an industry association and self-regulatory body for fintech lenders member companies, represents more than 50% of the digital lending market in India.

For FACE member companies, nearly three fourth of the loan value disbursed in FY21-22 were through the own-balance sheet and the remaining in partnership with other regulated entities, usually non-banking financial companies (NBFCs).

The report showed that Maharashtra led the pack with 16% disbursals, while the southern states collectively account for 44% of the uptake.

Data also revealed that 98% of loans were categorized as personal loans, which individuals take for many diverse use cases such as business, emergencies, consumption, and education among others.

Further, 80% of all loans disbursed were short-term loans with less than six-month loan tenure. The average was a little over ₹14,000 but varies across lenders.

Overall, males (90%), young (less than 30 years: 58%), educated (graduate and over: 79%), and low-income individuals (individual annual income less than ₹3 lakh: 61%) dominate the personal credit market segment, though wide variation amongst lenders in terms of customer segments.

Both salaried and non-salaried were equally served.

Further, eight in 10 customers are graduates or have higher qualifications. Such a profile of the customer is explained by the fact that apps require a level of understanding of English and high comfort with the digital interface app.

Commenting on the report, Sugandh Saxena, chief executive officer at FACE said, “Trends from the report show the role of fintech lending in serving young customers from low and middle-income segments by providing customized, convenient, cost-effective credit. We firmly believe that a progressive regulatory and policy framework, focus on customer-centricity and the market innovation will continue to facilitate sustainable growth of the fintech lending industry to support individuals in addressing the opportunities and challenges coming their way.”