INFOCUS
CONSUMER LENDING
India To Have 900 Mn+ Active Internet Users By 2025
By 2025, 56% of all new internet users will be from rural areas, and 65% of new internet users will be female
SOURCE: IAMAI, INC42 ANALYSIS
7K+ 5G Enabled Indian Cities/towns 395 Mn
Fintech Market In India: Key Highlights
(2030)
Source: Inc42
Fintech Revolution In India: A $2.1 Tn Market By 2030
Lendingtech emerges as the most lucrative segment in the Indian fintech sector
Overall Fintech Market Lendingtech Insurtech Payments Neobanking Investment Tech
Source: Secondary Sources, Inc42 Calculations
Note: The total addressable market (TAM) shown above is calculated using a bottom-up approach for the overall fintech market size and top-down for the fintech segments mentioned
Global
Fintech Startup Ecosystem: India Vs The US Vs China
Total Fintech Funding (2014-2022)
Source: Inc42
India’s Fintech Startup Landscape: Who’s Who In Subsectors
Source: Inc42
Note: This is not an exhaustive list
India’s Fintech Landscape: Key Players
Indian Fintech Startups: Funding Pyramid
Source: Inc42 Note:
Source: Inc42
Note: 2023 data is for the period between January 1 and August 31, 2023
The State Of Fintech Funding In India
Fintech Funding For Indian Startups Stumbles In Q2 2023
Funding deals recorded a 48% YoY decline In Q2 2023
Lendingtech Most Funded Fintech Sub Sectors In Q2 2023
Source: Inc42
Lendingtech Leads Fintech Sub-Sectors In Deal Count For Q2 2023
Bengaluru And Delhi NCR Topped The Fintech Funding Charts In Q2 2023
Source: Inc42
Delhi NCR
Bengaluru
Face-Off In Exits Through M&A Continues
M&A in fintech sector reported an 2.6x increase from the lowest value in Q2 2020
Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023 Q2-2023
Active Indian Fintech Investors In Q2 2023
Source: Inc42
Kunal Shah
InFocus
The Rise Of Consumer Lending Startups In India
Digital Consumer Lending: A $720 Bn+ Opportunity In India By 2030
Consumer lending market to grow at 22% CAGR between 2023 to 2030
22% CAGR 2022 To 2030
Digital Consumer Lending Landscape
Source: Inc42
Note:
Global Lendingtech Ecosystem: India Vs The USA Vs The UK Vs The Germany
Total Lending Market In 2022
Estimated Percentage Growth In Digital Lending (CAGR)
Estimated Number Of Users In Digital Payments By 2027
Funding (2014 To 2022)
Source: Statista, Inc42 Analysis, Secondary Sources
How Digital Consumer Lending Works In India
India Stack: End to End Digital Lending Now a Reality
CONSUMER LENDING END-TO-END DIGITAL EXAMPLE
(30 second sanction and immediate disbursement)
Customer Requests for financing
Customer requests for a retail loan
Basic info and eKYC Digital data capture; Aadhaar number triggers eKYC
Credit bureau check
Automated check of customer credit behavior Online fee collection
Automated calculation and collection of fees ( bank, credit card) Automated sanction
Automated rules check using customer and external data Ecosystem data
Addnl. detail from ecosystem (e.g., income surrogate data)
INDIA STACK
Source: BCG
India’s Lendingtech Opportunity Across Age Groups
Age Groups (Digital Lending Consumers)
Source: Inc42 and multiple secondary sources
BNPL, Instant Loans
BNPL, Supply Chain Financing Invoice Financing, Corporate Cards, Line Of Credit, SMB Lending, P2P, Instant Loans
BNPL, Supply Chain Financing, Invoice Financing, Secured Lending, Corporate Cards, Line Of Credit, Smb Lending, P2P, Instant Loans, SMB Lending Ideal Digital Lending Products
Supply Chain Financing, Invoice Financing, Secured Lending, Corporate Cards, SMB Lending
Secured Lending, Corporate Cards
Secured Lending
Digital Lending In India: Key Segments By Market Share
Personal loans have the highest market share in both volume and value
Source: Equifax
Digital Lending In India: Key Segments By
Average Ticket Size
Apr’20- sep’20
Apr’21- sep’21
Apr’22- sep’22
Factors Fueling The Growth Of Digital Consumer Lending In India
Internet Penetration At 48.7% In The Country
173 Mn Households To Have Annual Income
Above INR 5 Lakhs By 2030
As Of July 2022, 78 Mn Credit Cards In Circulation
Over 100 Funded Consumer Lending Startups In India
Indian Consumer Lending Startups Have Raised More Than $3 Bn From 2014 To Q2 2022
Lending Market In India Saw A 19.7% Growth Rate In August 2023
Source: Inc42, Multiple Secondary Sources
Majority Personal Loans Disbursed In FY22 Were Under INR 1 Lakh
Source: CRIF
Majority Of FY22 Personal Loans Valued Between INR 5 Lakh And INR 10 Lakh
Source: CRIF
The Covid Booster Shot For Indian Digital Consumer Lending Startups
Consumer lending is growing at 73% CAGR from 2014 to 2022
Personal Loan Startups Dominate The Funding Amount And Deals Chart
Investors Backing Digital Consumer Lending In India
Startups
Rupeek, OneCard, Eduvanz Financing
Aerem,SlicePay
Avanti Finance,Rupeek, Streamsource
Eduvanz Financing,Kissht, SlicePay
LoanTap, Propelld, Upwards Fintech
ePayLater, FlexMoney, MyShubhLife
Indiagold, PaySense
Liquiloans, BASIC Home Loan, HomeCapital
SlicePay,Indiagold, PaySense
Finomena, OneCard, ItzCash
SlicePay, Easy
MyShubhLife, ShopSe
Consumer Lending In India: A Sentiment Analysis
In Association with
BNPL Players: App Functionality Takes Center Stage
The graph presented below are based on a Likert scale of 1 to 10. A rating below 5 indicates dissatisfaction among consumers, while a rating of 6 and above signifies positive customer sentiment.
Many BNPL providers struggle to provide transparent, swift, and user-friendly customer support for users seeking assistance. The graph displayed below uses a Likert scale ranging from 1 to 10, with 1 being the lowest and 10 the highest perception during the sentiment analysis. A score below 5 indicates consumer dissatisfaction.
User Sentiment Analysis:
Ola Money Postpaid Least Favoured In Terms Of Charges & Fees
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the highest. A score below 5 indicates consumer dissatisfaction. Notably, no player surpasses a score of 5 in the sentiment analysis.
Source: Clootrack, Inc42
on
Simpl lazypay
Digital Gold Players: What Customers Want The Most?
Ease Of Process No.1 Priority For Customers Rupeek Ranks No. 1 In Ease Of Accessing Gold Loans
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the highest. A score below 5 indicates consumer dissatisfaction.
Digital Gold Players: What Customers Want The Most?
Gold Loans Users Choose
Source: Clootrack, Inc42
Rupeek Ranks No. 1 In App Functionality For Digital Gold Loan Users
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the highest. A score below 5 indicates consumer dissatisfaction
Rupeek
Muthoot
Digital Personal Loans Startups Outpace Traditional Players In Ease Of Process
The graph displayed below uses a Likert scale ranging from 1 to 10, with 1 being the lowest and 10 the highest perception during the sentiment analysis. A score below 5 indicates consumer dissatisfaction.
Source: Clootrack, Inc42 Note:
Quicker Approvals, Faster Processing: The Digital Loan Apps' Edge
The loan details, which encompass instant approval, processing time, and loan services, offer a distinct advantage to the digital personal loan ecosystem, making them highly beneficial for customers.
Source: Clootrack, Inc42
Note:
Digital Loan Startups Surpass Conventional Players In Speed And Approvals
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the highest. A score below 5 indicates consumer dissatisfaction.
Source: Clootrack, Inc42
Loan Details (1- 10 Scale)
Upwards Fintech
For
Digital Personal Loan Users Cite Poor Customer Care As Top Concern
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the highest. A score below 5 indicates consumer dissatisfaction. Customer Care Service (1- 10 Scale)
Source: Clootrack, Inc42
Zenda
Canara Bank
Digital Loan Startups Have Better Interest Rates Compared To Conventional
Players
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the highest. A score below 5 indicates consumer dissatisfaction.
Clootrack, Inc42
Fintech
Smartcoin
Rupeek
Indusin
Listed Fintech Startups’ Stock Continue Positive Momentum
Fintech In India: Key Challenges
Fraudulent Activities
The rising incidence of fraudulent activities and deceptive schemes poses a significant risk to India's burgeoning fintech sector. As digital transactions become increasingly prevalent, malevolent actors continually devise new ways to exploit vulnerabilities in the system. This emphasises the immediate need for robust security protocols and vigilant oversight within the fintech landscape to safeguard both consumers and the credibility of digital financial operations.
Technological Disparities Between Legacy Financial Institutions And Fintechs
Traditional financial institutions such as banks often have outdated technology infrastructures that may not seamlessly integrate with modern digital lending platforms. This disconnect impedes the efficacy of partnerships between digital lenders and conventional financial systems, reducing financial inclusivity and affecting profitability.
Building Consumer Trust and Increasing Awareness
Fintech startups, particularly those in the realm of digital lending, encounter challenges in securing consumer trust, notably in Tier 2 locations and beyond. Public unfamiliarity with digital financial services and a preference for face-to-face interactions have compelled fintech firms to adopt an omnichannel strategy.
Escalating Customer Acquisition Costs
Heightened competition within the fintech sector has led to an increase in marketing expenditures aimed at attracting new customers. Such increased outlays contribute to cash burn and adversely affect a company's bottom line.
Attracting and Retaining Skilled Talent
The rapid expansion in fintech has given rise to a growing demand for professionals with specialist skills in areas such as data analytics, financial services, and software development. The industry requires a highly-skilled workforce for both innovation and effective execution to transpire.
Source: Inc42
Methodology
Funding data is for the period between 2014 and Q2 2023
Seed stage: Startup at angel or seed stage
Growth stage: Startups at Series A and B funding stage
Late stage: Startups at Series C or above funding stage
Bridge funding: Connecting funding rounds (in this case primarily Pre Series A & B)
Unicorn refers to any digital / tech company valued at or above $1 Bn (we also include companies which have ever received $1 Bn valuation, even if they lost the unicorn status later)
A soonicorn is any public or private digital/tech company valued at or above $200 Mn.
Data in some sub sectors may differ from previous reports because our sector thesis was updated in 2023
Inc42
Fintech Sub Sector
Segmentation:
Insurtech: Technology-driven innovation in the insurance industry.
Banking: Financial services provided by fintech startups
Payments: Systems and solutions for facilitating financial transactions.
Lendingtech: Technological advancements in lending and borrowing processes.
Investment Tech: Technology applied to investment and wealth management.
Fintech SaaS: Fintech solutions offered as Software as a Service (SaaS).
Crowdfunding: Raising funds from a large number of people, often via online platforms.
Calculating the Total Addressable Market (TAM) for LendingTech involves a multi-faceted analysis. Firstly, the anticipation that the overall LendingTech market will expand to $1.3 trillion by 2030 signals a substantial market opportunity. This projection reflects several factors, including the surging growth in consumer lending, which holds immense potential. Specifically, the growing consumer lending sector in India, driven by increasing consumer penetration, contributes significantly to this outlook. Furthermore, the estimate that consumer lending is set to capture 55% of the entire lending market by 2030, equivalent to $720 billion, highlights its dominant role within the industry. Notably, the current landscape reveals that personal loans already constitute 66% of all loans, underscoring the existing traction in this segment. Consequently, when calculating TAM for LendingTech, we consider these elements in tandem, acknowledging the substantial and expanding market opportunity driven by the growth and dominance of consumer lending.
Source: Inc42
www.inc42.com
Inc42 is India’s largest tech media & information platform on a mission to build & serve India’s tech, startup & internet economy.
From breaking the latest news to discovering the hottest startups, from spotting upcoming trends to simplifying complex concepts, we cover everything tech in India’s internet economy.
Born in January 2015, Inc42 has become the leading source for news & analysis on India’s rapidly growing tech, startup & internet economy. Inc42, with over 35,000+ published stories, 80+ research reports, 120+ conferences & events & having featured 1000s of entrepreneurs, now reaches over 25 Mn+ tech leaders & professionals every month.
Inc42 Media, 59/16, 4th Floor, Jujhar Tower, RD Marg, Kalkaji, New Delhi, Delhi 110019
Contact: editor@inc42.com
SAIFLAN AIJAZ ANALYST
DISCLAIMER
The data provided in this report has been obtained from public and private sources. We have made every attempt to ensure that the information presented in this report is accurate and free from any discrepancies. Ideope Media Pvt Ltd, the parent company of Inc42 Media and Inc42 DataLabs, is not responsible for any inaccuracy in the information presented or for any damages caused by the use of information provided in this report. In case of any discrepancy or errors in the data, you can contact us at editor@inc42.com and we will try our best to update the information in the digital version of the report. We are constantly updating our database of startups due to new person using or relying on any information in this publication.
This report has been prepared in good faith on the basis of information available at the date of publication without any independent verification. Ideope Media Pvt. Ltd. does not guarantee the accuracy, reliability or completeness of the information in this publication. Readers are responsible for assessing the relevance and accuracy of the content of this publication. While this report talks about various individuals and institutions, Ideope Media Pvt. Ltd. will not be liable for any loss, damage, cost or expense incurred or arising by reason of anyperson using or relying on any information in this publication.
This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Ideope Media Pvt Ltd and is not intended to represent or imply the existence of an association between Ideope Media Pvt Ltd and the lawful owners of such trademarks. Information regarding third-party products, services and organisations was obtained from publicly available sources, and Ideope Media Pvt. Ltd. cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. The views and opinions in this report should not be viewed as professional advice with respect to your business.