Fintech personal loans in India fell 15% in Q3

India's fintech personal loan market is seeing a significant decrease. According to a report from the Fintech Association for Consumer Empowerment (FACE), digital personal loans dropped by 15% in the third quarter of fiscal year 2024-25. In Q3, fintech lenders disbursed Rs 25,050 crore in personal loans. This is down from Rs 29,608 crore in the previous quarter. This decline is the largest since the initial months of the COVID-19 pandemic. Overall, the total value of digital personal loans approved by fintech non-banking financial companies (NBFCs) fell to Rs 81,365 crore in the first nine months of this fiscal year. Last year, it was Rs 96,524 crore. This indicates a trend of slowing growth in the digital lending market. Despite the decline, fintech NBFCs still dominate the sector, making up 76% of all personal loan approvals in the first nine months. However, they hold only 13% of the total sanctioned value because they focus on small loans for underserved customers. The average loan size has also decreased. It is now Rs 9,758, down by about 10% from last year. Most borrowers are young people under 35, and many loans are taken in smaller cities. Over one-third of the loans are from borrowers in Tier III cities and beyond.