CRIF High Mark and DLAI Release First 'FinTech Barometer' for Personal Loans

CRIF High Mark, a leading Indian credit bureau, in collaboration with Digital Lenders Association of India (DLAI) – the national level industry association of digital lenders with 100 members, has launched the first edition of the ‘CRIF - DLAI FinTech Barometer Vol I Personal Loans – Deep dive,’ today.

In alignment with policy objective of ushering the Universal financial inclusion digital lenders have used technology to enable non face to face, faster, paperless disbursals to increase access to credit to previously underserved and unserved segments. Through customised, innovative products and utilisation of data analytics, such lenders can differentiate themselves from the legacy players. Such a shift from traditional to customised lending, will strengthen objective of universal financial inclusion and enable enhancement of asset quality, selection of customer profiles, and boost profitability.

CRIF High Mark and DLAI have analysed the role of digital lenders in overall Personal loans and Short-term Personal Loans from March’20 to Sept’23. These categories drive credit coverage and financial inclusion. This report is based on data reported to the Bureau as on Sept’23 and data from 52 DLAI members has been considered.

Key Insights into trends and patterns shaping the Retail, Personal and Short-term Personal Loan categories:

1.                   Resurgence in Consumer Lending Post Covid

·                     For Consumer lending Universe, the Portfolio size has grown by 64% from Mar’20 to Sept’23 and PAR 31-180 Improved from 4.7% to 3.5% over same period (Improvement by 25%)

·                     Consumer Lending witnessed a resurgence in lending Post covid led by Products viz STPL (204% growth) followed by Gold Loans (121%), Personal Loans (115%), Credit cards (76%) respectively from Mar’20 to Sept’23

·                     Increase in PAR 31-180% for HL and Credit Cards from Mar’23 to Sept’23

·                     Top States for Consumer Loans are Urbanized and Industrialized states Ex: Maharashtra Tamil Nādu and Karnataka. Uttar Pradesh and Rajasthan being exceptions to this trend

2.                   Personal Loans in India – A Deep Dive

·                     Resurgence in Overall Personal Loans post Covid with 116% growth in Portfolio outstanding from Mar’20 to Sept’23

·                     Resurgence is heterogenous among States: Good growth in states Maharashtra (99%), Tamil Nadu (95%) and Karnataka (111%) despite higher base

·                     Good growth in Overall PL Originations. 2X growth in Origination Value and 2.6X growth in Origination Volume from FY20 to FY23

·                     In Personal Loan (PL) universe, Digital Lenders (DLAI members) contributed 7.9% to Originations value and 19.8% to Originations volume in FY23

·                     While Originations volume (Sanctioned loans) of loans with ticket size under Rs 1 Lakh are still significant for Digital lenders (DLAI members), Originations value (Sanctioned amount) of these loans - esp STPL (under 50k) has decreased from FY20 to FY23. There is significant increase in Originations value (Sanctioned amount) share for Digital lenders (DLAI members) of loans with ticket size above Rs 1 Lakh from FY20 to FY23

·                     Growing dominance of NBFCs in Originations: Increasing Share of Digital Lenders (DLAI Members) and Other NBFCs by Originations value from FY20 to FY23. Increasing Share of Other NBFCs in Originations volume during same period

3.                   Short Term Personal Loans in India –A Deep Dive

·                     Growth coming from Beyond Top 100 Cities. 3.5X growth seen for Beyond Top 100 cities vs 2.3X growth for Top 8 cities & Top 9-100 cities in Originations volume for ticket size <Rs 10K from FY20 to FY23

·                     Growth coming from Beyond Top 100 Cities. 5X growth seen for Beyond Top 100 cities vs 3X growth for Top 8 cities & Top 9-100 cities in Originations volume for ticket size <Rs 10K-50K from FY20 to FY23

·                     Beyond Top 100 Cities with less saturation operating at similar risk levels compared to Top 8 and Top 9-100 cities

Commenting on the report Mr. Sanjeet Dawar, Managing Director, CRIF High Mark, said “New-age digital lenders have revolutionised lending through wider reach and innovative products, and now they are also focusing on asset quality and customer selection. We, at CRIF High Mark, are pleased to partner with DLAI for the launch of the CRIF - DLAI FinTech Barometer Vol I. CRIF High Mark is committed to engaging and curating reports that are beneficial for the industry and the ecosystem at large.

Commenting on the report Mr. Jatinder Handoo, CEO, DLAI said, “In a strategic collaboration, DLAI and CRIF-High Mark have produced a comprehensive report on India’s retail lending landscape and movement of Digital lenders’ portfolio in terms of quantum, quality, and the outreach. This joint synthesis of insights marks a pivotal moment in understanding and interpreting the industry’s pulse, paving the way for transformative strategies that align with the nation’s aspirations for financial accessibility and technological advancement.” I hope that the FinTech barometer volume 1 would be used as a benchmark publication by industry analysts, researchers, policy makers, friends, media personnel and other relevant stakeholders.