The share of fintech non-banking financial companies (NBFCs) in personal loan disbursal has grown almost three-fold over the past six years — from 28 percent in FY19 to 74 percent in FY25, a report has said.
Data from 79 fintech NBFCs shows that these firms have distributed close to 11 crore personal loans, valued at over Rs 1.05 lakh crore, in the previous fiscal.
The data has been analysed from a report published by the Fintech Association for Consumer Empowerment (FACE), an RBI-recognised self-regulatory organisation in the fintech sector. Credit bureau CRIF High Mark The data analysed the data for FACE.
Other NBFCs distributed 2.5 crore loans worth Rs 2.2 lakh crore, while banks disbursed 1.2 crore personal loans, worth over Rs 5.5 lakh crore, in the financial year that ended on March 31, 2025.
The average value of a personal loan sold by a bank is over 45 times that of a fintech NBFC. Banks share of loan volume is only 8 percent but corner 63 percent in value. The average value of personal loans distributed by fintechs is around Rs 9,800 and that of banks is around Rs 4.5 lakh.
Fintech loans accounted for 12 percent of the sanctioned value but 74 percent of the sanctioned volume, focusing on sizeable underserved segments that need small-value loans, the report said, highlighting the role of fintechs in addressing the credit availability gap.
Around 40 percent of the personal loans distributed by fintech NBFCs are below Rs 25,000, a segment where the stress levels are considered high. The Reserve Bank of India (RBI) has been cautioning financial institutions, asking them to reduce their exposure to this segment.
The report makes a case for small-value loans for around 50 crore adults which have an annual family income of between Rs 3 lakh and Rs 12 lakh.
“The fintech business models are distinct in their ability to reach the customer segments, most of whom are young and need small-value loans for a variety of reasons,” the report said.
Fintech personal loan customers are younger, with over two-thirds aged below 35. Around 44 percent of the loans are to customers who have a credit bureau data of less than five years, indicating how these loans are helping them build a credit profile, CRIF High Mark said.
While there are concerns about the risk profile, the report said almost 60 percent of the customers have a mid-low risk profile.
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