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Report Description

Report Description

Forecast Period

2025-2029

Market Size (2023)

USD512 Billion

CAGR (2024-2029)

12.01%

Fastest Growing Segment

NBFCs

Largest Market

North India

India personal loan market was valued at USD512 Billion in 2023 and is anticipated to project robust growth in the forecast period with a CAGR of 12.01% through 2029. The India personal loan market is expected to grow during the forecast period due to the increasing popularity of Peer-to-Peer (P2P) lending, focus on customer experience, and shift towards digital platforms and online lending.

India Personal Loan Market Scope

The personal loan market in India refers to the financial landscape surrounding the borrowing and lending of personal loans. It is a vibrant and dynamic sector that plays a crucial role in fulfilling the financial needs of individuals across various segments of society. Personal loans are unsecured loans provided by banks, non-banking financial companies (NBFCs), and other lending institutions to meet the diverse personal expenses of individuals, such as medical emergencies, education expenses, home renovations, weddings, travel, debt consolidation, and more.

Personal loans offer flexibility in terms of usage. Borrowers can utilize the funds for various personal purposes, such as medical emergencies, education expenses, debt consolidation, home improvements, weddings, vacations, or any other legitimate need. The lender generally does not impose restrictions on how the funds are utilized.

Banks and NBFCs are the primary players in the personal loan market, offering competitive interest rates and flexible repayment options to attract customers. With the advent of technology and digitization, online platforms, and mobile apps have emerged as convenient channels for loan applications, making the process quick and hassle-free. This digital transformation has significantly improved accessibility and convenience for borrowers, enabling them to compare loan offers, submit documents, and track their loan status from the comfort of their homes.

India Personal Loan Market Overview

The personal loan market in India has experienced significant growth and development over the years, making it one of the most dynamic and competitive financial sectors in the country. With a large population and a growing middle class, the demand for personal loans has surged, driven by various factors such as increasing aspirations and the need for immediate access to funds.

Furthermore, the personal loan market in India has witnessed intense competition among banks and non-banking financial companies (NBFCs). This competition has led to innovative loan products, attractive interest rates, and flexible repayment options, offering borrowers a wide range of choices. Additionally, lenders have started customizing loan offers based on credit profiles, income levels, and specific needs of borrowers, further enhancing the accessibility and affordability of personal loans.

The increasing demand for personal loans in India can be attributed to various factors such as rising medical expenses, education costs, travel aspirations, home renovations, and debt consolidation needs. Personal loans are also used for meeting wedding expenses, purchasing consumer durables, and funding small business ventures.

The personal loan market in India has witnessed a rapid digital transformation in recent years. Online platforms and mobile apps have emerged as convenient channels for loan applications, enabling borrowers to compare loan offers, submit documents, and track loan status easily. This digitization has made the loan application process quicker and more accessible to individuals across the country.

India Personal Loan Market Drivers

The personal loan market in India is driven by several factors that have contributed to its rapid growth and popularity. Growing awareness and financial inclusion among consumers is the major driver which drives the growth of India personal loan market. There has been an increased awareness about personal loans and their benefits among the Indian population. Financial institutions and lenders have also made efforts to promote financial literacy and expand their reach to underserved areas, contributing to greater financial inclusion and access to personal loans.

With the advent of technology, accessing personal loans in India has become more convenient and streamlined. Digital lending platforms and mobile apps have made the loan application process quick, easy, and hassle-free. These platforms also provide instant loan approvals and disbursals, making personal loans more accessible to a wider audience. Therefore, ease of accessibility further fuels the expansion of the India personal loan market.

Additionally, the consolidation of debts drives the India personal loan market during the forecast period. Personal loans have become popular among individuals looking to consolidate their existing debts, such as credit card debts or multiple loans. By consolidating debts into a single personal loan, borrowers can simplify their financial obligations and potentially reduce their overall interest burden.

Furthermore, the flexibility & customization of personal loans also drives the India personal loan market during the forecast period. Personal loans offer flexibility in terms of loan amount, repayment tenure, and interest rates. Borrowers can choose loan terms that best suit their financial capabilities and requirements. This customization has made personal loans an attractive option for individuals who need funds for various purposes.

India Personal Loan Market Trends

A major trend in the India personal loan market is digital transformation which is driving the industry’s growth during the forecast period. The personal loan market has witnessed a significant shift towards digital platforms and online lending. Fintech companies and digital lenders have emerged, offering convenient and streamlined loan application processes, automated underwriting, and quick approvals. This has made it easier for individuals to access personal loans from the comfort of their homes, using smartphones or computers.

Additionally, the rising popularity of Peer-to-Peer (P2P) lending further fuels the growth of India’s personal loan market during the forecast period. P2P lending platforms have gained traction in India, providing an alternative lending channel for personal loans. These platforms connect borrowers directly with individual lenders, eliminating the need for traditional financial institutions. P2P lending offers competitive interest rates, faster approval processes, and opportunities for investors to diversify their portfolios.

Furthermore, the Indian government's initiatives, such as Digital India and financial inclusion programs, have played a crucial role in expanding the personal loan market. The Jan Dhan Yojana, Aadhaar-based e-KYC, and GST implementation have improved the accessibility of financial services and simplified loan application processes. Additionally, the introduction of the Goods and Services Tax (GST) has streamlined the loan approval process for businesses.

India Personal Loan Market Challenges

India’s personal loan market faces several challenges that hinder its growth and efficiency. A major challenge in the India personal loan market is the high risk associated with unsecured lending. Personal loans are typically unsecured, meaning they do not require collateral. This makes lenders more cautious and results in higher interest rates for borrowers. The risk of default is a significant concern, especially among individuals with lower credit scores or unstable income sources.

The long documentation process also hinders the growth of the India personal loan market. Traditional banks and financial institutions often require extensive paperwork, including income proofs, bank statements, and identity documents. This process can be time-consuming and inconvenient for borrowers, discouraging them from seeking personal loans. Additionally, the reliance on physical documentation limits the scope for digital lending and hampers the adoption of innovative technologies.

Recent Developments

  • In 2023, HDFC Bank plans to introduce open-market, 10-second personal loans for every Indian citizen who qualifies for a financial loan.
  • In 2022, Axis Bank started disbursing loans through the Account Aggregator (AA) framework, which offers easy and quick access to customers' financial information in a secure manner. An Account Aggregator (AA) is a kind of RBI-regulated entity (with an NBFC-AA license) that assists individuals in securely and digitally accessing and sharing information from one financial institution to any other regulated financial institution in the AA network.
  • In 2022, ICICI Bank intends to offer retail lending services including personal loans, auto loans, and credit cards on digital lending platform "iLens" in partnership with TCS.

India Personal Loan Market Opportunities

The India personal loan market presents significant opportunities for growth and innovation. India's middle-class population is expanding, driven by rising incomes, urbanization, and increasing aspirations. This segment represents a significant opportunity for lenders to tap into a growing market of individuals seeking personal loans for various purposes. Lenders can tailor their loan offerings to cater to the specific needs and preferences of this target group.

Additionally, India has witnessed a rapid increase in digital penetration, especially with the widespread adoption of smartphones and the availability of affordable internet services. This digital transformation provides an opportunity for lenders to leverage technology and reach a wider customer base through online platforms, mobile apps, and digital marketing strategies. Simplified application processes, quick approvals, and seamless documentation submission can attract tech-savvy borrowers.

Furthermore, while personal loans have gained popularity in metro cities, there is a significant opportunity to expand into tier 2 and tier 3 cities. These cities are witnessing economic growth and an increasing demand for credit. Lenders can establish a presence in these cities by setting up branches, leveraging local partnerships, and offering personalized loan solutions to tap into this untapped market.


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Market Segmentation

The India personal loan market is segmented into provider, tenure, interest rate, and region. Based on the provider, the India personal loan market is segmented into the bank, and non-banking financial company (NBFC). Based on tenure, the India personal loan market is segmented into less than 12 months, 12-36 months, and more than 36 months. Based on the interest rate, the India personal loan market is segmented into 10%-15%; 16%-20%; above 20%. The market analysis also studies regional segmentation to devise regional market segmentation.

Market Players

IDFC FIRST Bank Limited, HDFC Bank Limited, ICICI Bank Limited, Axis Bank Limited, Kotak Mahindra Bank Limited, Navi Technologies Limited, Lendingkart Finance Limited, Whizdm Innovations Private Limited (Moneyview), One97 Communications Limited (Paytm), and Bajaj Finserv Ltd are the major market players in the India personal loan market.

Attribute

Details

Base Year

2023

Historic Data

2019 – 2022

Estimated Year

2024

Forecast Period

2025 – 2029

Quantitative Units

Revenue in USD Million, and CAGR for 2018-2022 and 2023-2028

Report Coverage

Revenue forecast, company share, competitive landscape, growth factors, and trends

Segments Covered

Provider

Tenure

Interest Rate

Region

Regional Scope

North, West, South, East

Key companies profiled

IDFC FIRST Bank Limited, HDFC Bank Limited, ICICI Bank Limited, Axis Bank Limited, Kotak Mahindra Bank Limited, Navi Technologies Limited, Lendingkart Finance Limited, Whizdm Innovations Private Limited (Moneyview), One97 Communications Limited (Paytm), and Bajaj Finserv Ltd, etc.

Customization scope

10% free report customization with purchase. Addition or alteration to country, regional & segment scope.

Pricing and purchase options

Avail customized purchase options to meet your exact research needs. Explore purchase options

Delivery Format

PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)

Report Scope:

In this report, the India personal loan market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

  • India Personal Loan Market, By Provider:
    • Bank
    • Non-Banking Financial Company (NBFC)
  • India Personal Loan Market, By Tenure:
    • Less than 12 Months
    • 12-36 Months
    • More Than 36 Months
  • India Personal Loan Market, By Interest Rate:
    • 10%-15%
    • 16%-20%
    • Above 20%
  • India Personal Loan Market, By Region:
    • North
    • West
    • South
    • East

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India personal loan market.

Available Customizations:

With the given market data, TechSci Research offers customizations according to a company’s specific needs. The following customization options are available for the report:

Company Information

  • Detailed analysis and profiling of additional market players (up to five).

India personal loan market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]

Table of content

Table of content

1.    Introduction

1.1.  Market Overview

1.2.  Key Highlights of the Report

1.3.  Market Coverage

1.4.  Market Segments Covered

1.5.  Research Tenure Considered

2.    Research Methodology

2.1.  Objective of the Study

2.2.  Baseline Methodology

2.3.  Key Industry Partners

2.4.  Major Association and Secondary Sources

2.5.  Forecasting Methodology

2.6.  Data Triangulation & Validation

2.7.  Assumptions and Limitations

3.    Executive Summary      

3.1.  Market Overview

3.2.  Market Forecast

3.3.  Key Regions

3.4.  Key Segments

4.    Voice of Customer Analysis (B2C Model Analysis)

4.1.  Respondent Demographics

4.1.1.        By Gender

4.1.2.        By Age

4.1.3.        By Occupation

4.2.  Brand Awareness

4.3.  Factors Influencing Personal Loan Availing Decision

4.4.  Customer Satisfaction Level

4.5.  Challenges Faced

5.    India Personal Loan Market Outlook

5.1.  Market Size & Forecast

5.1.1.        By Value

5.2.  Market Share & Forecast

5.2.1.        By Provider Market Share Analysis (Bank, Non-Banking Financial Company (NBFC))

5.2.2.        By Tenure Market Share Analysis (Less than 12 Months, 12-36 Months, More Than 36 Months)

5.2.3.        By Interest Rate Market Share Analysis (10%-15%; 16%-20%; Above 20%)

5.2.4.        By Region Market Share Analysis

5.2.4.1.                North Market Analysis

5.2.4.2.                West Market Analysis

5.2.4.3.                South Market Analysis

5.2.4.4.                East Market Analysis

5.2.5.        By Top 5 Companies Market Share Analysis, Others (2023)

5.3.  India Personal Loan Mapping & Opportunity Assessment

5.3.1.        By Provider Market Mapping & Opportunity Assessment

5.3.2.        By Tenure Market Mapping & Opportunity Assessment

5.3.3.        By Interest Rate Market Mapping & Opportunity Assessment

5.3.4.        By Region Market Mapping & Opportunity Assessment

6.      India Bank Personal Loan Market Outlook

6.1.  Market Size & Forecast        

6.1.1.        By Value

6.2.  Market Share & Forecast

6.2.1.        By Tenure Market Share Analysis

6.2.2.        By Interest Rate Market Share Analysis

6.2.3.        By Region Market Share Analysis

7.    India Non-Banking Financial Company (NBFCs) Personal Loan Market Outlook

7.1.  Market Size & Forecast        

7.1.1.        By Value

7.2.  Market Share & Forecast

7.2.1.        By Tenure Market Share Analysis

7.2.2.        By Interest Rate Market Share Analysis

7.2.3.        By Region Market Share Analysis

8.    Market Dynamics

8.1.  Drivers

8.1.1.        Growing awareness & financial inclusion

8.1.2.        Ease of accessibility

8.1.3.        Flexibility & customization

8.2.  Challenges

8.2.1.        High risk associated with unsecured lending

8.2.2.        Long documentation process

9.    Impact of COVID-19 on the India Personal Loan Market

9.1.  Impact Assessment Model   

9.1.1.        Key Segments Impacted

9.1.2.        Key Regions Impacted

9.1.3.        Key Distribution Channel Impacted

10.  Market Trends & Developments

10.1.             Rise of Peer-to-Peer (P2P) Lending

10.2.             Shift toward digital platforms and online lending

10.3.             Consolidation of debts

10.4.             Focus on customer experience

10.5.             Increasing demand for a personal loan

11.  Porter’s Five Forces Model

11.1.             Competitive Rivalry

11.2.             Bargaining Power of Buyers

11.3.             Bargaining Power of Suppliers

11.4.             Threat of New Entrants

11.5.             Threat of Substitutes

12.  SWOT Analysis

12.1.             Strengths

12.2.             Weaknesses

12.3.             Opportunities

12.4.             Threats

13.  Policy & Regulatory Landscape

14.  India Economic Profile

15.  Competitive Landscape

15.1.             Company Profiles 

15.1.1.     IDFC FIRST Bank Limited

15.1.1.1.             Company Details

15.1.1.2.             Product & Providers

15.1.1.3.             Financials (As Per Availability)

15.1.1.4.             Key Market Focus & Geographical Presence

15.1.1.5.             Recent Developments

15.1.1.6.             Key Management Personnel

15.1.2.     HDFC Bank Limited       

15.1.2.1.             Company Details

15.1.2.2.             Product & Providers

15.1.2.3.             Financials (As Per Availability)

15.1.2.4.             Key Market Focus & Geographical Presence

15.1.2.5.             Recent Developments

15.1.2.6.             Key Management Personnel

15.1.3.      ICICI Bank Limited    

15.1.3.1.             Company Details

15.1.3.2.             Product & Providers

15.1.3.3.             Financials (As Per Availability)

15.1.3.4.             Key Market Focus & Geographical Presence

15.1.3.5.             Recent Developments

15.1.3.6.             Key Management Personnel

15.1.4.     Axis Bank Limited       

15.1.4.1.             Company Details

15.1.4.2.             Product & Providers

15.1.4.3.             Financials (As Per Availability)

15.1.4.4.             Key Market Focus & Geographical Presence

15.1.4.5.             Recent Developments

15.1.4.6.             Key Management Personnel

15.1.5.     Kotak Mahindra Bank Limited     

15.1.5.1.             Company Details

15.1.5.2.             Product & Providers

15.1.5.3.             Financials (As Per Availability)

15.1.5.4.             Key Market Focus & Geographical Presence

15.1.5.5.             Recent Developments

15.1.5.6.             Key Management Personnel

15.1.6.     Navi Technologies Limited

15.1.6.1.             Company Details

15.1.6.2.             Product & Providers

15.1.6.3.             Financials (As Per Availability)

15.1.6.4.             Key Market Focus & Geographical Presence

15.1.6.5.             Recent Developments

15.1.6.6.             Key Management Personnel

15.1.7.     Lendingkart Finance Limited       

15.1.7.1.             Company Details

15.1.7.2.             Product & Providers

15.1.7.3.             Financials (As Per Availability)

15.1.7.4.             Key Market Focus & Geographical Presence

15.1.7.5.             Recent Developments

15.1.7.6.             Key Management Personnel

15.1.8.     Whizdm Innovations Private Limited (Moneyview)     

15.1.8.1.             Company Details

15.1.8.2.             Product & Providers

15.1.8.3.             Financials (As Per Availability)

15.1.8.4.             Key Market Focus & Geographical Presence

15.1.8.5.             Recent Developments

15.1.8.6.             Key Management Personnel

15.1.9.     One97 Communications Limited (Paytm)      

15.1.9.1.             Company Details

15.1.9.2.             Product & Providers

15.1.9.3.             Financials (As Per Availability)

15.1.9.4.             Key Market Focus & Geographical Presence

15.1.9.5.             Recent Developments

15.1.9.6.             Key Management Personnel

15.1.10.   Bajaj Finserv Ltd

15.1.10.1.           Company Details

15.1.10.2.           Product & Providers

15.1.10.3.           Financials (As Per Availability)

15.1.10.4.           Key Market Focus & Geographical Presence

15.1.10.5.           Recent Developments

15.1.10.6.           Key Management Personnel

16.  Strategic Recommendations/Action Plan

16.1.             Key Focus Areas

16.2.             Target Provider

16.3.             Target Tenure

17.  About Us & Disclaimer

(Note: The companies list can be customized based on the client requirements.)

Figures and Tables

Frequently asked questions

Frequently asked questions

The growing awareness & financial inclusion, ease of accessibility, and flexibility & customization are the key factors driving the India personal loan market during the forecast period.

The growing popularity of Peer-to-Peer (P2P) lending and focus on customer experience are the major trends that drive the India personal loan market during the forecast period.

High risk associated with unsecured lending and long documentation process are the challenges that may hinder the growth of the India personal loan market during the forecast period.

IDFC FIRST Bank Limited, HDFC Bank Limited, ICICI Bank Limited, Axis Bank Limited, Kotak Mahindra Bank Limited, Navi Technologies Limited, Lendingkart Finance Limited, Whizdm Innovations Private Limited (Moneyview), One97 Communications Limited (Paytm), and Bajaj Finserv Ltd are the major market players in the India personal loan market.

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