Around 97% of loan originations by fintechs comprised consumer durable loans and personal loans in 2022-23, data from TransUnion CIBIL showed. Another report by Fintech Association for Consumer Empowerment and Equifax showed that the quantum of loans overdue by more than 90 days rose to 2.50% as on March 31, from 1.83% a year ago.
"The fintech business model requires them to keep the pace of disbursement since they earn fee income and spread income on the volume of disbursements," India Ratings and Research said in a recent report.
Additionally, fintechs cannot afford a slowdown in the pace of disbursements as this can weigh on the profitability of these entities.
Further, some digital lenders are making losses at the operating level and credit losses further eat into the capital, say experts.
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