Fintechs Dominates Small-Ticket Loans, Securing 77% Market Share: Study 

Fintechs have seen a rise in both the value and volume of small-ticket loans, as per a study titled “‘Charting New Horizons for Fintech Lending: Navigating Profitability and Scalability’. The study was conducted by Experian India and the Digital Lenders Association of India (DLAI). 

The study says, “Fintech now constitutes 10 per cent of new disbursements by value. They have also been a key facilitator for incumbents.” Fintechs consisted of small-ticket loans in 2018, as per the Business Standard. The loan volume was less than Rs 1,00,000. "Currently, they make up 77 per cent of the market,” says the report. 

While all lenders in the personal loan credit market below Rs 1 lakh have experienced growth, fintech companies and those enabled by fintechs have expanded at a notably fast rate. 

Regarding the value front, from 29 per cent of small ticket loan disbursement in 2018, it increased to 51 per cent in FY 2024, until September 2023. 

Rise in personal loans 

There has been a huge increase in the personal loan portfolio at Rs 81,00 crore. The report says, “Personal loan portfolio size at the end of September’ 23 stands at Rs 81,000 crore. NBFCs have the highest market share of 34 percent, followed by Fintech with 33 percent of the market.” 

Further, fintech companies are also tapping into new opportunities that are opening in both small urban locations and towns. The report says, “New geographies provide new ‘blue oceans’ for fintech as traditional business hotspots are dominated by traditional players.” 

The report also says, “Fintech currently has a narrow market focus on small-ticket personal loans and business loans.” With regard to small-ticket business loans, fintechs received Rs 32,566 in FY24 (till September 2023). This was a sharp jump from Rs 3,816 in 2017.