Financial technology or fintech lending companies doubled their disbursements in fiscal year 2021-22, resulting in a total of 2.66 billion worth of loans ₹18,000 crores, according to a report by the Fintech Association for Consumer Empowerment (FACE).
FACE, an industry association and self-regulatory body for member companies of fintech lenders, accounts for over 50% of the digital lending market in India.
For FACE member firms, almost three-quarters of the value of loans disbursed in FY21-22 were through their own balance sheets and the rest in partnership with other regulated entities, typically corporations. non-bank financial institutions (NBFC).
The report showed that Maharashtra led the pack with 16% disbursements, while southern states collectively accounted for 44% of absorption.
The data also revealed that 98% of loans were categorized as personal loans, which individuals take out for many diverse use cases such as business, emergency, consumer, and education, among others.
In addition, 80% of all loans disbursed were short-term loans with a term of less than six months. The average was a bit above ₹14,000 but varies by lender.
Overall, men (90%), young people (under 30: 58%), graduates (graduates and over: 79%) and low-income people (individual annual income below ₹3 lakh: 61%) dominates the personal loan market segment, although there is wide variation among lenders in terms of customer segments.
Employees and non-employees were equally served.
In addition, eight out of 10 customers are graduates or have higher qualifications. Such a customer profile is explained by the fact that the applications require a level of understanding of English and a great ease with the digital interface application.
Commenting on the report, Sugandh Saxena, CEO of FACE, said, “The trends in the report show the role of fintech loans in serving young customers in low- and middle-income segments by providing personalized, convenient and cost-effective credit. We firmly believe that a progressive regulatory and policy framework, emphasis on customer centricity and market innovation will continue to facilitate the sustainable growth of the fintech lending industry to help individuals seize opportunities and the challenges facing them. »