Fintech Lenders in India's Small-Ticket Personal Loan Market
Fintech lenders are increasingly dominating India's small-ticket personal loan market, with significant changes observed by March 2026. Their influence and the dynamics within the lending sector are outlined in the following points:
Market Share and Growth
- Fintech firms accounted for 56.8% of the personal loan market for loans below Rs 50,000 by March 2026.
- The sector experienced a 41.6% year-on-year expansion in credit, significantly outpacing the overall segment growth of 20.1%.
- Non-bank finance companies (including housing finance companies) held a 30.7% market share.
- Bank's share decreased to 10.1%, while the remaining 2.3% was held by other lenders.
Asset Quality and Delinquencies
- Delinquencies in small-ticket personal loans from fintech lenders were at 6.4%.
- Comparatively, NBFCs had a delinquency rate of 5.7%, and banks had 4.1%.
- Unsecured loans made up 70.5% of fintech lenders' loan books, with a significant portion lent to borrowers under 35, indicating higher risk exposure.
Broader Consumer Lending Market
- Overall, asset quality improved with business loan delinquencies falling to 1.8%.
- Credit card delinquencies decreased to 1.4%, and personal loan delinquencies eased to 0.9%.
Microfinance Sector Trends
- The microfinance sector began to stabilize with credit expansion after a seven-quarter decline.
- Despite this, the borrower base shrank by 22.7 lakh in the latest quarter.
- Asset quality improved for the fifth consecutive quarter, with reduced loans overdue by 31-180 days.
- The share of borrowers with loans from three or more lenders decreased to 9.7% in March 2026, indicating reduced multiple borrowing.
