AN ANALYSIS OF CREDIT GROWTH THROUGH TRADITIONAL BANKS AND FINTECH COMPANIES IN INDIA

Abstract

The evolution of FinTech companies in banking sector has shifted the way of providing banking services. Utilizing the power of innovative technologies like machine learning, artificial intelligence, etc. these FinTech companies have captured the financial market. Now they are moving toward the core business segment of banks i.e., lending. Fintech lending covers all the credit activities performed over the internet via a digital platform or web. FinTech companies provide digital platforms to lenders for providing credit facilities. Recently, the credit through FinTech companies has shown rapid growth in terms of new loan accounts as well as amount disbursed. This paper has analysed the growth of FinTech credit based on the data of 119 companies from 2019 to 2021 and it was found that the both number of new loan accounts and credit disbursed have grown with 51% and 42% respectively. The FinTech credit portfolio outstanding was also 16% Y-o-Y growth. With rising trend, the FinTech has highest delinquency rate after Public sector banks. However, while comparing with the volume and value of credit through schedule commercial banks in India, FinTech credit is far behind the SCBs and it will take lot of times and support of regulatory authorities & government to come parallel to SCBs.