Digital loan disbursals surge 147% in Q3 FY23: Report

Digital loan disbursals among the domestic fintech startups surged 147% year-on-year (YoY) to 1.83 crore in terms of volume, according to the latest report by Fintech Association for Consumer Empowerment (FACE). In the third quarter of FY22, the volume of digital loan disbursals stood at 74 lakhs. Domestic digital lenders disbursed loans valued at ₹18,537 crore in Q3 of FY23, registering a growth of 118% YoY as against ₹8,520 crore in the same period a year ago.

“There has been steady growth in disbursements during the current financial year, and until three-quarters of FY 22-23, member companies collectively disbursed over 5 crore loans crossing ₹51,000 crore. Disbursement volume shows the scale of contribution by fintech lending towards financial inclusion,” the report says.

According to the report, on a sequential basis, however, at an aggregated level, the disbursement growth rate plateaued on a sequential basis. Disbursement volume and value grew by 6% and 2% in Q3 FY 22-23 over Q2 FY 22-23 compared to 21% and 24% in Q2 FY 22-23 over Q1 FY 22-23. “There is much variation within companies contributed by multiple factors, including reasons unique to individual companies. Nearly two-thirds of the companies registered positive growth rates in Q3 FY 22-23 compared to Q2 FY 22-23, and more than half reported a slower growth rate in Q3 FY 22-23 over Q2 FY 22-23 compared to the previous quarter (Q2 FY 22-23 over Q1 FY 22-23),” the report says.

Between Q1 and Q2 of FY 22-23, the digital lending volumes and values surged by 21% and 23%. “Fintech lending is accelerating the expansion of formal credit in the country across unserved and underserved market segments. Data from the latest quarter is again a demonstration of customers’ trust and preference for fintech lending and fintech lenders’ ability to meet the credit demand as they align to  Digital Lending Guidelines (DLG),” says Sugandh Saxena, CEO, FACE.

“On the solid foundation of DLG, fintech lending will expand and get better, with a stronger focus on robust systems and processes safeguarding customers’ interests and creating value,” she adds.

As per the report, the average ticket size declined by 10% YoY. The aggregated average ticket size in Q3 of FY23 stood at ₹12,895 as against ₹14,275 in the same period a year ago. The average ticket size at an aggregated level has hovered around ₹12,000 during FY22-23. “Average ticket sizes, however, significantly vary amongst companies due to the widely different focus on products and customer segments and associated risk profiles. We also see upward and downward movements regarding ticket size as companies evolve with products and customer segments,” the report says.

Last week, Shaktikanta Das, the governor of the Reserve Bank of India (RBI) said that the daily unified payment interface (UPI) transactions crossed 50% in the past 12 months to 36 crore. The UPI transactions in February 2022 stood at 24 lakh crore. In terms of value, Das said transactions registered a growth of 17% worth ₹6.27 lakh crore in the past 12 months.