India's Fintech sector projected to grow with focus on product expansion, risk control, and inclusion

India’s Fintech industry is growing with emphasis on safer lending, financial inclusion , and better risk control, according to a recent TransUnion CIBIL report .

Fintech-led non-banking financial companies (NBFCs), which operate mainly through digital platforms, had an outstanding loan book of Rs 1.3 trillion by December 2024. This represents a sharp 32% year-on-year growth.

Despite holding just 1% of the total loan balance across the lending industry, Fintech firms have made a big impact in small-ticket personal loans (STPLs). Nearly 89% of personal loans under Rs 50,000 originated from Fintech lenders, reflecting their strong grip on this segment.

The report also highlights a clear shift towards secured loan products like loans against property and business loans . Business loan originations from Fintech lenders now make up 12% of all such loans in the industry.

There is also a visible push toward underserved markets. More young and rural borrowers are turning to Fintech platforms, which is helping to promote financial inclusion. Still, even borrowers with strong credit scores are mostly receiving smaller loans, averaging under Rs 50,000.

The report further points out that while Fintech lenders have the potential to grow in higher-ticket personal and consumer loans, they are yet to build lasting customer loyalty outside STPLs. Expanding their product range could help address this gap.

There are also rising concerns. Delinquency in business and property loans is increasing, underlining the need for better credit risk monitoring. The report urges Fintechs to use tools like CreditVision, which offer deeper insights into borrower behaviour using trended data.

Overall, while India’s Fintech sector shows promise, sustainable growth of the sector will depend on how well it adapts to the evolving lending environment—by diversifying its products and strengthening its risk frameworks.