FinTech Personal Loans Drive Digital Financial Inclusion

8.3 Cr Sanctions in 9 months of FY24-25

Sugandh Saxena, CEO of FACE

FinTech BizNews Service

Mumbai, India, 25 Mar 2025. The Fintech Association for Consumer Empowerment (FACE), the Reserve Bank of India (RBI)-recognised Self-Regulatory Organisation in the FinTech sector (SRO-FT), has released its latest report analysing the landscape of FinTech personal loans in India. The report, covering data from Apr 2018 to Dec 2024, highlights the growing role of FinTech Non-Banking Financial Companies (NBFCs) in expanding credit access across diverse customer segments. 

While FinTech NBFCs account for only 13% of the total personal loan sanction value in FY 24-25 (until December 2024), they drive 76% of sanction volumes, reinforcing their position as key enablers of digital financial inclusion. Amidst a deceleration in sanctions, the report underscores FinTech's potential to expand formal credit access and offers insights into evolving customer demographics, regulatory shifts, and market dynamics.

Sugandh Saxena, CEO of FACE, emphasised the FinTech sector’s impact, stating: "FinTech is key to digital financial inclusion and inclusive growth for the country. FinTechs have made a remarkable contribution through their customer-centric and digital approach to meet customers’ diversified credit needs, making credit accessible and convenient for several market segments. With over two-thirds of loans catering to young and tier II & III city customers, FinTech is key to meeting the country’s growing aspirations and resilience. At FACE, we focus on contributing to the FinTech journey by championing responsible conduct, innovation, and customer protection, which bring value to customers and all stakeholders."

Key Highlights of the Report:

Market Leadership in Volume

• FinTech NBFCs sanctioned 8.3 Cr loans worth Rs 81,365 Cr in FY 24-25 (until Dec 2024), maintaining their lead in digital personal loans with a focus on high-volume, small-value lending to under-served customer segments. 
• However, growth is slowing. Quarter-on-quarter sanction value declined by 15% in Q3 FY24-25 compared to Q2 FY24-25, and the overall growth rate for the nine months in FY 24-25 was 16% over the comparable period in FY 23-24. 

Focus on Underserved Markets

• More than a third of loans were sanctioned to customers in Tier III and beyond, highlighting FinTech’s role in reaching underserved populations.
• Two-thirds of the total sanctioned value was to individuals under 35, emphasising FinTech’s role in catering to young customers' needs and preferences for digital financial services. 

Accessible Credit

• The average ticket size of fintech personal loans stood at Rs 9,758, enabling customers to tap opportunities, manage cash flows and build credit history.
• Higher-value loans were increasingly granted to customers with a longer credit history, ensuring risk mitigation while fostering financial inclusion.

Portfolio and Risk Trends

• The total outstanding portfolio of FinTech NBFCs stood at Rs 72,775 Cr as of Dec 2024, with improving credit quality.
• FinTech NBFCs accounted for 42% of all active personal loan accounts but only 5% of the total personal loan outstanding value, underscoring their role in small-value lending.

Shift in Customer Vintage (FY 24-25 vs. FY 23-24)

• In FY 24-25 (until Dec 2024), FinTech NBFCs allocated 55% of their sanctioned value to customers with a credit bureau vintage of over 5 years.
• Lending to newer customers (bureau vintage of less than 1 year) rose to 9% in FY 24-25 compared to 5% in FY 23-24.