MD Finance, a global fintech company providing digital financial solutions backed by in-depth market analysis and proven expertise in finance and technology, has released its latest report, “India: Fintech and Alternative Lending Overview”. 

The report found outstanding growth in the aggregate income of non-banking financial companies (NBFC), estimated at 21.5% YoY in 2023. Meanwhile, the alternative  lending portfolio increased by 27% YoY when the volume of active loans showed a 14% rise. The report also provides insights into India’s fintech landscape, showcasing the trend of sustainable market growth since 2021. 

India has rapidly expanded technology adoption in the last five years since the pandemic started. Driven by a tech-savvy young population, the country has successfully developed an innovative response to the expanding demand for various financial services and contactless and paperless payments. A supportive environment created by governmental authorities reinforces private initiatives and investors' interests.

Key findings include:

• India has a well-mature digital lending sector, counting over 350 companies operating, and digital payments. Together, they generate the largest revenues and funding with a combined share of 85% of capital raised.
• The core of the alternative lending segment includes banks, non-banking financial companies and microfinance institutions (NBFC-ML). They have accumulated a major portfolio of 72% in almost equal shares.
• The alternative lending sector has shown strong year-to-year growth since 2021. Comparing 2024 and 2021, the sector doubled in terms of the value of new loans issued. Regarding the number of new loans issued, the sector demonstrated 1.5 times increase. 
• In 2022-2023, the aggregate income of NBFC showed growth from €44.2B to €53.7B (21.5%) and total assets increased from €446.9B to €513B (15%). This trend has remained the same in 2024.
• The alternative lending portfolio demonstrated 14% growth with €161M active loans as of March 2024 compared to €142M as of March 2023. YoY rise of portfolio outstanding is 26.8% — from €39.5B in 2023 to €50.1B in 2024.

The findings showcase rising consumer demand, a favourable fintech landscape and accelerating engagement of various digital lending services, fueling industry attraction for local and foreign investors.  

“India’s fintech landscape provides a solid foundation for accelerating the growth of digital lending and the overall market. By 2030, most fintech segments will maintain their raise by 4-6 times. Scalability opportunities for digital lending will lay in product diversification by region and customer segments, personalization and enhancing client service, and launching mutually beneficial partnerships.”, — summarized Oleksandr Bielokhin, Senior Market Research & Analysis Specialist at MD Finance. 

The report includes detailed data revealing the fintech industry landscape, key players in alternative lending, and upcoming trends. 

The full report “India: Fintech and Alternative Lending Overview” is available here: https://www.mdfin.com/post/india-fintech-and-alternative-lending-overview