The Lending Space is Now Dominated by Fintechs
The first half of FY25 has seen a massive change in the lending market where the Fintech lenders have cornered 76% of the total personal loans. This surge also brings into the focus the increased role of NBFCs and Fintech players in the financial market.
Why the Banking Sector Slowed Down
Personal loan disbursement by traditional banks slowed down. It was mainly due to the changes in the regulatory environment and conservative risk management approaches. This opened up a space for Fintech lenders to fill the credit gap that arose by the reluctance of traditional banks to provide credit for investment.
What this means for Borrowers
The increased participation of Fintechs implies that lending is gradually becoming more customer-oriented with faster processing, fewer documents, and individual approaches to loans. But the experts advise borrowers to be careful with the higher interest rates and other charges that are usually attached to the online lenders.
