Fintech in India Captures 52% Market Share: Experian India Whitepaper Experian India, the regional arm of the global business services company has recently come up with a white paper called "Small is BIG: How Fintechs are Revolutionising Lending", highlighting the rapidly growing roles of fintech in providing small-ticket loans to the previously underserved segments in the country.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Experian India, the regional arm of the global business services company has recently come up with a white paper called "Small is BIG: How Fintechs are Revolutionising Lending", highlighting the rapidly growing roles of fintech in providing small-ticket loans to the previously underserved segments in the country.
According to the whitepaper, fintech companies have provided over INR 2,48,006 crores worth of personal loans and as much as INR 28,607 crores as business loans as of March 2024. The report points out that these loans, more often than not under an INR 50,000 bracket have penetrated the New-to-Credit (NTC) population, people with thin credit files, and sub-prime borrowers who have been previously excluded from the formal financial system.
Impacting Financial Inclusion
The report states that fintech companies have reached a market share of 52 per cent in personal loans, proving beneficial to the underserved. Disbursal of personal loans has increased by 24 per cent in Bihar, 21 per cent in Tamil Nadu, and 20 per cent in Uttar Pradesh in FY24 compared to FY23.
Business loans, however, saw a growth rate of 133 per cent in Karnataka, 118 per cent in Uttar Pradesh, and 67 per cent in Bihar for the same period, highlighting significant progress in financial inclusion in the country.
Asset Quality and Risk Management
The whitepaper also sheds light on the challenges fintechs face, more particularly in managing asset quality, noting that while fintechs have been able to cater to high-risk segments, the Non-Performing Asset (NPA) ratio for fintech-originated loans stands higher than the industry average.
The fact underscores the need for fintechs to improve their risk management frameworks, especially during times when they deal with over-leveraged customers. The white paper suggests that improved data analytics and better credit scoring models and clouds help alleviate these risks.
Manish Jain, Country Managing Director at Experian India, said, "The fintech revolution in India is just beginning, and there's enormous potential for growth. Fintech companies have already made a big impact by providing credit to those who need it most, but there's still more to be done. The insights in this white paper highlight both the opportunities and challenges ahead.
Fintech in India is also leading the way in sectors such as green finance, and supporting sustainable and environmental-friendly projects. The sector has also made significant inroads into the agri-finance sector, supporting small farmers.
Moreover, the white paper points out that fintechs are leading the way in sectors like green finance, to support sustainable and environmentally friendly projects. Similarly, fintech companies have made significant inroads into the Agri-finance sector, helping to support millions of small farmers.
