INFOCUS
CONSUMER LENDING
CONSUMER LENDING
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
(2030)
Source: Inc42
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
Total Fintech Funding (2014-2022)
Source: Inc42
Source: Inc42
Note: This is not an exhaustive list
Source: Inc42 Note:
Source: Inc42
Note: 2023 data is for the period between January 1 and August 31, 2023
Funding deals recorded a 48% YoY decline In Q2 2023
Source: Inc42
Source: Inc42
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
Source: Inc42
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
Source: Inc42
Note:
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
(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)
Source: BCG
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
Personal loans have the highest market share in both volume and value
Source: Equifax
Apr’20- sep’20
Apr’21- sep’21
Apr’22- sep’22
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
Source: CRIF
Source: CRIF
Consumer lending is growing at 73% CAGR from 2014 to 2022
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
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.
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
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.
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
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:
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:
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
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
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
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.
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.
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.
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.
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
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
Fintech Sub Sector
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
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