Sushma Kaza PhD’s Post

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Market Intelligence Specialist/ Business & Macroeconomic Research/Thought leadership| Data Mining, Report Writing, Industry Trends | Expertise in Digital Technologies and Banking & Payments| Emerging Tech

RBI rings the alarm bells 🚨 for personal loan lending by Fintech!! RBI in it's Financial Stability report says "Delinquency levels among borrowers with personal loans below Rs 50,000 remain high. In particular, NBFC-Fintech lenders, which have the highest share in sanctioned and outstanding amounts, also have the second highest delinquency levels, only below that of small finance banks" Vintage delinquency, which is a measure of slippage, remained relatively high in personal loans at 8.2%. Little more than a half of the borrowers in this segment have three live loans at the time of origination and more than one-third of the borrowers have availed more than three loans in the last six months. The RBI noted that certain segments of consumer credit, esp. personal loans and credit cards pulled down the rate of growth in overall consumer credit. During April 2022 and March 2024, bank lending to the retail sector grew at a CAGR of 25.2% and lending to services - which includes bank lending to NBFCs - grew at 22.4%, far exceeding overall credit growth of 16.4%. The report elaborated on the red flags - rising stress in retail loans in private sector lenders.

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