Latest news with #TransUnionCIBIL
Indian Express
2 days ago
- Business
- Indian Express
Unsecured loans seen key to meeting retail credit demand in India
Unsecured loans given by fintech firms will be instrumental in meeting demand for retail credit in India over the coming years, with the absence of collateral for many households that are in the 'early stages of the asset formation cycle' making it unlikely that secured loans will be able to completely fulfill the rising demand. 'Today, only 65 per cent of India's personal bank credit is secured, compared to 90 per cent in the US. Fortunately, India's robust credit bureau data ecosystem has enabled unsecured lending to thrive in recent years,' Boston Consulting Group (BCG) and QED Investors said in their Global Fintech Report 2025, released Monday. As per the report, Indians' demand for consumer loans is rising rapidly due to robust economic growth – India's GDP expanded by a faster-than-expected 7.4 per cent in the final quarter of 2024-25 – and 'changing cultural attitudes toward debt'. Demand for loans from the middle class is also expected to rise in tandem with the segment itself, which is projected to make up 40 per cent of the population by 2031 from 31 per cent at present, the report said. This is already reflected in data – according to credit information company TransUnion CIBIL, 61 per cent of fintech customers were less than 30 years of age compared to 36 per cent for the rest of the industry. To be sure, growth in unsecured loans has slowed appreciably in the last couple of years following tightening of regulations by the Reserve Bank of India. As on April 18, while overall bank credit was up 10.3 per cent year-on-year, credit card outstanding and the 'other personal loans' category – both of the unsecured variety – were 10.6 per cent and 9.0 per cent higher, respectively. These figures are sharply lower than where they were before the RBI took action on November 16, 2023 to dampen what it termed as 'very high growth' in certain segments: as on November 17, 2023, banks' credit card outstanding was 34.2 per cent higher and 'other personal loans' were up 24.3 per cent. Amid the tightened regulatory norms that asked lenders to set aside greater capital than before for consumer loans, excluding certain types such as housing and education, among others, Indian fintechs have continued to grow, albeit at a slower pace. In terms of live unique customers, fintech firms saw a growth of 40 per cent in 2023 and 15 per cent in 2024 compared to 16 per cent and 9 per cent, respectively, for the industry, TransUnion CIBIL data showed. These firms are particularly dominant when it comes to small loans and were responsible for nearly nine out of every 10 loans of less than Rs 50,000 that were made in October-December 2024. While BCG and QED Investors said in their report that 'demand for unsecured credit remains' in India, the latest quarterly results for some of the country's most prominent players in the space are not encouraging. In the quarter ended March 2025, Paytm distributed personal loans to the tune of Rs 1,422 crore, down 19 per cent from October-December 2024, as its lending partners tightened risk policies. 'Personal credit, unless something bigger changes, we will not see much larger growth,' Founder and Chief Executive Officer Vijay Shekhar Sharma said in a post-earnings analyst call on May 6, 2025. Paytm is not alone, with Mobikwik posting a 41 per cent fall in digital lending disbursals in FY25 after it discontinued its Zip buy-now-pay-later product in December 2024 'due to low lender appetite'. According to BCG and QED Investors' report, lending 'remains a significant opportunity' for fintechs as they only account for around 3 per cent of global lending revenues of $2 trillion. And if unsecured personal loans are excluded, the penetration by fintechs is less than 1 per cent, with banks at an advantage due to the access they have to low-cost funds in the form of deposits. '…very few fintech lenders have truly weathered a complete credit cycle; in that sense, the industry is still untested,' the report said.
India Gazette
6 days ago
- Business
- India Gazette
India's fintech sector poised for next phase of growth with product diversification, smarter risk management: Report
New Delhi [India], May 30 (ANI): India's Fintech sector continues to grow rapidly and is now entering a new phase focused on product diversification, smarter risk management, and deeper financial inclusion, according to a report by TransUnion CIBIL The report mentioned that as of December 2024, Fintech lenders, defined as digitally driven NBFCs, had an outstanding loan balance of Rs 1.3 trillion, marking a significant 32 per cent year-on-year growth. Though they currently contribute only about 1 per cent of total industry loan balances, their dominance in small ticket personal loans (STPLs) is striking. Nearly 89 per cent of personal loan originations under Rs 50,000 were issued by Fintech lenders. The report said, 'Business loans and property loans being popular products opted by FinTech consumers continue to present opportunity for product diversification.' The report highlighted a strategic shift among Fintechs toward offering more secure loan products, such as loans against property and business loans. These segments saw an increase in their share of overall balances, indicating Fintechs' intent to meet broader credit demands. In fact, business loan originations by Fintechs now make up 12 per cent of all such industry loans. TransUnion CIBIL also pointed to a growing base of younger and rural borrowers among Fintech customers, a trend that strengthens financial inclusion. It said, 'FinTech lenders are attracting younger and rural consumers, thus promoting financial inclusion. FinTechs have reduced average loan amounts across risk tiers.' However, the average loan amount disbursed by Fintechs has declined across all risk categories. Even customers with top credit scores received loans below Rs 50,000 on average. One of the key suggestions in the report is the need for Fintechs to diversify further, particularly by expanding into higher-ticket personal loans, consumer loans, and secured products. While customers are exploring these segments, their loyalty to Fintech brands beyond STPLs remains low. The report said, 'Foraying into personal loans of higher ticket size could also help in addressing consumer preferences.' In terms of risk, early delinquencies in STPLs remain stable, but there is a noticeable increase in overdue accounts in business loans and loans against property. The report stressed the need for stronger portfolio risk monitoring and smarter debt collection strategies to ensure sustainable growth. To navigate the evolving lending landscape, the report recommended using advanced data analytics, like its CreditVision algorithms, which provide a trended view of borrower behavior. This can help Fintechs make better lending decisions and manage risks effectively. Overall, the report paints a positive outlook for India's Fintech sector, provided it adapts swiftly by broadening its product base and tightening its credit risk frameworks. (ANI)
Hans India
29-05-2025
- Business
- Hans India
India's fintech lenders draw younger, more rural customer base: Report
The fintech sector lenders are drawing a younger and more rural customer base, with 61 per cent of borrowers being under the age of 30, and 24 per cent residing in rural areas, a report showed on Thursday. The share of prime and above-prime consumers in fintech originations has also increased steadily, reaching 62 per cent in December 2024 from 60 per cent in December 2023 and 55 per cent in December 2022. Notably, however, average ticket sizes have declined across all risk tiers, according to the report by TransUnion CIBIL. India's fintech lending sector is undergoing a transformation, driven not just by volume, but by a fundamental shift in borrower demographics, as they increasingly serve younger and more rural populations. This marks a significant evolution in the fintech customer base, reflecting the sector's growing role in democratising access to credit across India's diverse population. According to the report for the quarter ending December 2024, fintech lenders now serve over 23.3 million consumers — up from 20.2 million in December 2023 and 14.4 million in December 2022. Outstanding balances reached Rs 1.3 trillion, with fintechs accounting for 1.03 per cent of total retail credit balances, highlighting lenders' expanding role in India's credit ecosystem. These trends highlight a significant opportunity for fintech lenders to deepen their reach in underserved segments, positioning them well for sustained growth in India's evolving credit landscape. 'The fintech lending sector has played a vital role in reshaping India's financial landscape by delivering faster and more accessible credit through innovative digital technology,' said Bhavesh Jain, MD and CEO, TransUnion CIBIL. This progress has expanded financial inclusion, reaching millions across diverse demographics and geographies. 'As the sector continues to evolve, sustained growth will rely on broadening product offerings and adopting data-driven approaches to provide more personalised financial solutions,' he maintained. Fintechs are also seeing stronger customer retention in the personal loan segment, especially in ticket sizes above Rs 50,000. As of December 2024, 48 per cent of borrowers in this segment had prior credit relationships with the same lender, higher than the 43 per cent who had that relationship in December 2023. 'FinTechs continue to reach ever more people, especially younger and unaddressed segments. As the industry grows, it is important that lending practices stay customer-centric and respond responsibly to evolving risks,' said Sugandh Saxena, CEO, FinTech Association for Consumer Empowerment (FACE).
The Hindu
23-05-2025
- Business
- The Hindu
Commercial credit portfolio of MSMEs grew 13%: report
The commercial credit portfolio for Micro, Small and Medium Enterprises (MSME) sector grew 13% year-over-year (YoY) as the overall credit exposure increased to ₹35.2 lakh crore as of March 31, 2025, according to TransUnion CIBIL and SIDBI's MSME Pulse Report for May 2025. This trend was largely driven by an increase in credit supply to existing borrowers, the report said. Overall MSME balance-level delinquencies improved to 1.8%, a 35 basis points drop from 2.1% in March 2024, primarily driven by the borrower segment with exposure of ₹50 lakh to ₹50 crore. The borrower segment with exposure up to ₹10 lakh, however, witnessed a slight deterioration at 5.8% in March 2025 compared to 5.1% in March 2024. Similarly, the borrower segment with exposure from ₹10 lakh to ₹50 lakh also saw a marginal rise in the delinquency level to 2.9% as compared to 2.8% in March last year. While the share of New-to-Credit (NTC) MSME borrowers to total new loan originations continued to be strong at 47% as of March 2025, it was lower than the share of 51% one year back. The report added that the trade sector contributed the greatest proportion of NTC borrowers at 53%, while the manufacturing sector saw the highest YoY growth (70%) in the number of NTC borrowers originating a commercial loan. Four states dominate commercial lending Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh and Delhi continued to dominate commercial lending, together accounting for 48% of the value of overall originations in the quarter ending March 2025. While the manufacturing sector had the greatest share of originations in Maharashtra, Gujarat, Tamil Nadu and Delhi, Uttar Pradesh had the most originations to the trade sector. Manoj Mittal, Chairman and Managing Director, Small Industries Development Bank of India (SIDBI) said that though the credit flow to the MSME sector has improved over the years, it still has an addressable credit gap. According to Bhavesh Jain, MD and CEO, TransUnion CIBIL, 'For MSMEs to achieve sustainable growth, it is imperative that they receive assistance in accessing formal credit and guidance in debt management.'
Fashion Value Chain
21-05-2025
- Business
- Fashion Value Chain
OneScore for Smart Borrowing: All You Need to Know
Even before applying for a loan, there is one thing that savvy customers always do: check their credit score. Whether one is using a loan app or visiting a bank branch, this step is the crucial part of any financial institution's evaluation process. A good score assures them that the applicant has a high potential to service a loan responsibly and pay EMIs on time. Given these facts, it only makes sense for consumers to track their credit score over time and improve it to boost the chances of getting approval for a loan. This is where the OneScore App plays an important role. It allows individuals to check their credit score and report for free. In addition, it provides personalised insights to improve their credit health and offers an easy way to check all active credit accounts in one place. Importance of Credit Score When Applying for a Loan When applying for a personal loan, home loan or any other kin of loan, a good credit score not only improves one's eligibility but also opens the doors to better loan terms. Here is how a good credit score directly influences key aspects: Improved Chances of Approval A credit score above 750 indicates a low risk to lenders, significantly increasing an applicant's chances of approval. However, the minimum requirement of a credit score may vary across institutions. Quicker Loan Processing Applicants with high credit scores can often enjoy faster disbursals. This is especially important when one needs funds fast to meet urgent needs. More Competitive Interest Rates Leading NBFCs and banks offer nominal interest rates to those with excellent credit scores. This helps consumers save on overall loan costs, helping bring down their EMI. Higher Loan Amount Lenders may often provide you higher loan amount with an excellent credit score. Longer Repayment Tenure A strong credit profile can also unlock extended repayment periods, typically ranging from 5 to 7 years. This makes repayment more comfortable as it brings the EMIs down. Reasons Smart Borrowers Use OneScore Before Applying for a Loan OneScore provides a smart and intuitive mobile application that is designed to give consumers complete control over their credit health. Here's why most savvy applicants use the OneScore App as the ultimate credit management and loan solution: Free Credit Score Checks for Life Users can track their TransUnion CIBIL and Experian scores anytime with this easy-to-use application, without paying a single rupee. OneScore is completely free, with no hidden charges or subscription fees, no matter how many times one checks their credit score and report. Comprehensive Credit Reports Applicants can use their credit information reports to spot suspicious activity and report errors or outdated information that may be hurting their credit score. Personalised Credit Insights OneScore also provides customised tips based on the applicant's credit behaviour. This helps them understand exactly what is affecting their score and how to fix it. Credit Goals Made Easy with the Score Planner By improving their credit score, individuals can qualify for a loan at potentially lower interest rates. They can use the Score Planner tool to set credit goals (such as reaching a score of 800 in 6 months) and get step-by-step guidance on how to achieve them over time. Instant Personal Loans with Easy EMI Planning When users require quick access to funds, they can rely on the OneScore Personal Loan. This facility allows one to get an unsecured loan of up to â¹5 lakhs without additional paperwork. The entire application process is streamlined to be 100% digital. All one has to do is follow these simple steps: Download the OneScore credit score management and loan app Select the amount one wishes to borrow and choose the employment status Choose the range of monthly income Get offers from reputed financial partners, compare them, and choose the ideal one OneScore's automated system ensures that users with a credit score of 730 or more can get their loans approved and disbursed quickly. This makes it an attractive option for those facing a financial emergency. EMI Calculator Makes Repayment Planning Easy Even after getting lower interest rates, it is crucial for applicants to choose a repayment tenure that suits their budget. OneScore simplifies this process by providing an easy-to-use EMI calculator. The user can determine the optimal EMI amount and choose an ideal repayment tenure just by entering their loan terms. The OneScore App supports individuals throughout their credit journey, from credit score management to choosing the optimal EMI terms. It even aids users in ensuring timely repayments by sending them reminders. This app thus empowers users to make informed decisions and make the most out of credit opportunities. Users can download the OneScore App now to check and improve their credit health and access funds when needed – all in one place.
