Stress continues to build up in fintech lending with PAR on the rise

The Reserve Bank of India's December 2024 Financial Stability Report states that household debt is on a rising trend

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The portfolio-at-risk (PAR) in the 31-91 days-past-due period rose to 1.8 per cent at end of September 2024 from 1.5 per cent a year ago. The same in the 360-days plus period rose from 3.2 per cent to 3.3 per cent indicating long-term delinquencies, says the CRIF-Digital Lenders Association of India Fintech Barometer.

 

The portfolio outstanding grew Rs 13.7 trillion at the end of September 2024, up 13.8 per cent year-on-year while the number of active loans in this period slowed down to 113.98 million, a decline of 4.7 percent. 

The Reserve Bank of India’s December 2024 Financial Stability Report has said that household debt is on a rising trend with super-prime borrowers doing so to create assets while the subprime borrowers are borrowing for consumption purposes. When viewed in conjunction with the previous regulatory actions, the data indicates the need to adopt a sustainable approach to portfolio growth in the unsecured lending space.