Credit Fintechs Clocked Highest Growth Among Lenders in 2019: Report
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Financial technology companies (fintechs) recorded the highest growth rate between Dec 2018 and Dec 2019 compared to other lender types at 92 per cent, as per a joint report by Equifax and Small Industrial Development Bank of India (SIDBI).
Titled Fintech Pulse, the report is a quarterly publication that provides insights on trends in the Indian fintech industry – from disbursements to delinquencies to top growing states and top loan categories.
“As another sector-building initiative, we are partnering with Equifax for ‘Fintech Pulse’ to demonstrate the differentiator prowess which fintechs bring in further easing access to credit. I am sure tracking the fintechs shall enable more inclusivity and transparent availability of timely and adequate credit,” said Mohammad Mustafa, IAS, Chairman and Managing Director, SIDBI.
Personal Loans Most Disbursed Product
Personal loans was the most disbursed loan product by non-banking financial companies (NBFCs) with a market share of 7.35 per cent, by number of active loans. Personal loan disbursements by NBFC Fintechs grew by 110 per cent in 2019 compared to industry average growth of 22 per cent, the report shows.
90+ delinquency— borrower missing due date for a single payment—for personal loans stood at 6.15 per cent as on Dec 2019, the report said.
After personal loans, business loans as a category clocked second highest growth with the outstanding portfolio growing by 74 per cent between Dec 2018 and Dec 2019.
During the period, new customers to the lending fintech sector ranged between 27 per cent and 33 per cent across quarters. Expectedly, millennials accounted for 51 per cent of loans by volume. However, their share by value was only 19 per cent as the younger populace typically borrows for small-ticket expenses, such as buying gadgets or for vacations.
In terms of geographical trends, fintech lending in urban and semi-urban areas accounted for 89 per cent loans by disbursed amount, whereas 80 per cent by number of loans. Top four states contribute 50 per cent of live loans by fintech lenders, the report shows.
KM Nanaiah, Managing Director, Equifax Credit Information and Country Leader, Equifax India and MEA said, “This new report will provide deep insights on the way forward for our industry by using the rich source of data provided to Equifax by lending institutions, including the Fintech NBFCs in the country.”