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Unsecured loans registered the fastest growth amongst all loan categories, with personal loans payable standing at Rs 10.25 trillion. About 73% of total loans availed in FY 22-23 had a tenure of less than 6 months. 79% of all loans taken digitally had a ticket size of less than Rs 10,000.
A report titled “The Rise and Evolution of India’s Digital Finance”, which was recently released during the ongoing global fintech fest in Mumbai threw fascinating insights on how young India is availing loans online. As per the report, till March 2023, the outstanding balances on credit cards in India stood at about Rs 2.10 trillion, marginally short of secured gold loans, which had an outstanding balance of Rs 2.36 trillion.
Unsecured loans registered the fastest growth amongst all loan categories, with personal loans payable standing at Rs 10.25 trillion. About 73% of total loans availed in FY 22-23 had a tenure of less than 6 months. 79% of all loans taken digitally had a ticket size of less than Rs 10,000.
Between 2021-22 and 2022-23, the number of loans with ticket size between Rs 25,000-50,000 rose from 3 to 4%. But overall, there was a 21% increase in the share of loans whose average ticket size exceeded Rs 10,000.
The report also noted that in FY 22-23, every borrower aged below 25 had close to 2 (1.7) active loans at all times. The quantum was especially higher for personal loans, where every individual below 25 years had at least 2 live loans at any given point of time.
Digital lending has also managed to bridge the rural-urban divide effectively. In 2018-19, metro cities accounted for 64% of all loans disbursed, while rural India accounted for 36% of all such loans. Fast track to 2022-23, the loan demand has evened out, with metros in India demanding 49% loans, and rural and semi-urban India made up for 51% of demand. Bihar, Andhra Pradesh, West Bengal and Uttar Pradesh championed India’s loan appetite.
One of the reasons why FinTechs enjoyed such a high volume of loan disbursals is because of the superior consumer experience they offer, per the report. When it comes to personal loans, about 57% applications were processed on the same day by fintech lenders. The number was even higher in consumer durables, where 70% applications were done within 24 hours.