In the first quarter of the financial year 2023-2024, member companies of the Fintech Association for Consumer Empowerment (FACE) disbursed loans totaling Rs 29,875 crore.
This represents a 32 per cent increase compared to the previous year and a 7 per cent growth from the previous quarter. These companies also disbursed more than 2.2 crore loans, showing a 31 per cent increase from the previous fiscal year and a 16 per cent rise from the previous quarter. The average loan amount during this period was Rs 11,043.
The report showed that growth rates varied among member companies because of factors like size, focus, and access to money. But, over half of the members saw an increase in the amount of money they lent out. The data mentioned in the report came from around 36 FACE member companies that lent to customers using their own NBFC or with other regulated organizations (mostly NBFCs).
Sugandh Saxena, CEO at FACE, said, “As the industry marks the first anniversary of Digital Lending Guidelines (DLG), we all draw much satisfaction in the way the industry is contributing to meet the credit needs of vast unaddressed segments, adapting extremely well to all the aspects of regulations—be it disclosures, data privacy/consent, transactions, grievance redressal, or partnerships.”
Introduced in September 2021, the Account Aggregator (AA) framework gained momentum in late 2022, as public-sector and large private-sector banks joined the framework.
Fintech NBFCs showed a rapid adoption of the AA framework in the current year, with 10 companies—responsible for 38 per cent of total disbursement volumes in Q1 FY23-24—disbursed 3.6 lakhs loans using the AA framework, constituting 4% of their total disbursement volumes.
As a whole, about 2% of loans were disbursed using the AA framework, the report said, adding that it is an encouraging beginning considering that the AA ecosystem has progressed in recent months.
FACE serves as an industry association and non-profit organisation dedicated to fostering fair and responsible digital lending practices through self-regulation and customer-centricity comprising fintech lenders, regulated balance-sheet lenders, and platform/aggregator partners.
“As the fintech lending industry scales and innovates with a much larger, complex, and diverse supply side consisting of banks, NBFCs, and LSPs, our new upgraded Code of Conduct put the industry in good stead by unifying the market practices around customer centricity and value creation,” Saxena added.
The Indian fintech sector is expected to reach a yearly revenue of USD 70 billion by FY30, according to a recent report by Elevation Capital and McKinsey. The report also predicts that the fintech industry could create USD 400 billion in value by 2030, which is four times the current level.
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