India’s Fintech Sector Poised for Sustained Growth
India’s Fintech sector continues its upward trajectory, with a new TransUnion CIBIL report highlighting strong growth and shifting priorities.
With a clear focus on product expansion, financial inclusion, and credit risk control, the industry is adapting to an evolving lending environment.
As of December 2024, Fintech-led NBFCs held ₹1.3 trillion in outstanding loans, reflecting an impressive 32% year-on-year growth.
While they contribute only 1% of the total loan book, Fintech firms have built a powerful presence in small-ticket personal loans (STPLs).
Dominating the Small Loan Market
Fintech companies now account for nearly 89% of all personal loans under ₹50,000, showing their dominance in the STPL segment.
By offering quick, digital-first solutions, these platforms are reaching young borrowers, gig workers, and individuals in underserved geographies.
Despite that, most of these borrowers—even those with strong credit scores—are only receiving loan amounts below ₹50,000.
Therefore, although growth is strong, scaling into higher-ticket lending and customer retention remains a major opportunity.
Signs of Product Diversification
Encouragingly, the report reveals a steady shift toward secured loan products like business loans and loans against property.
Fintechs now originate 12% of all business loans in India—indicating momentum in commercial lending and SME support.
This trend shows that Fintech lenders are broadening their focus, although they must improve customer loyalty across loan categories.
Consequently, product innovation must go beyond STPLs to build a sustainable and diverse lending portfolio in the coming years.
Financial Inclusion: Rural and Young Borrowers
Fintech platforms are increasingly reaching first-time credit users in rural and semi-urban markets, promoting digital financial inclusion.
This democratization of access is crucial, especially in regions where traditional banks offer limited reach or low credit penetration.
Moreover, tech-led onboarding and fast disbursement make digital lenders attractive to younger audiences seeking quick and flexible financing options.
Still, even with higher reach, retaining these users long-term will depend on offering customized, scalable financial solutions.
Credit Risk Monitoring Remains a Key Priority
However, the report also highlights rising delinquency levels in business and property loan segments, raising concerns among industry stakeholders.
To stay resilient, Fintechs must strengthen credit risk frameworks and adopt advanced borrower analysis tools like CreditVision.
CreditVision provides trended data and deeper borrower insights, helping lenders detect repayment behavior changes before defaults occur.
Therefore, scaling responsibly requires Fintechs to invest in analytics-driven underwriting and post-disbursement monitoring systems.
The Road Ahead: Building Sustainable Models
India’s Fintech sector has the momentum, but long-term growth will depend on how firms manage risk and diversify products.
As competition grows, focusing on responsible lending, technology-driven insights, and expanded loan offerings will be essential.
Although the STPL market is mature, moving into mid- and high-ticket loans will unlock new revenue streams and strengthen loyalty.
Ultimately, Fintech lenders must evolve into full-spectrum digital credit providers, balancing speed with security and inclusion with stability.