Digital lenders disbursed Rs 97,381 crore in H1 on surge in small personal loans: Face report

Digital lenders continued to scale in the first half of the current fiscal year, disbursing personal loans worth Rs 97,381 crore, a 25% year-on-year (YoY) increase, according to the Fintech Association for Consumer Empowerment (Face).

The Digital Personal Loans Market Report for H1 FY25-26, based on credit bureau data for over 110 digital non-banking finance companies (NBFCs), showed that these lenders disbursed 6.4 crore loans in H1, accounting for 80% of all personal loans in the country.

In value terms, however, digital lenders made up just 19% of the market, indicating they largely catered to small-ticket, short-tenure credit.


Digital loan disbursements grew 26% sequentially over the previous half-year, reversing a contraction seen in H2 FY25. The growth in disbursement value also saw a gradual rise in ticket sizes. The average digital loan amount rose about 14% from a year earlier, to Rs 15,177.

Face was recognised as a self-regulatory organisation in the fintech sector (SRO-FT) by the Reserve Bank of India (RBI) in 2024.

The report also suggests deepening the penetration of digital credit among younger and underserved demographics. Borrowers under 35 accounted for 60% of the sanctioned value, while tier-III towns and beyond contributed 39%; nearly half of all loans sanctioned were to rural and semi-urban customers.

Further, the report noted an improvement in portfolio quality, with delinquencies greater than 90 days falling to 2.1% as of September 2025, from 2.5% in June 2025.

This comes as the RBI has been steadily tightening its regulatory oversight on digital lending in a bid to curb delinquencies and rising fraud. Despite that, the segment has expanded its role in meeting short-term credit demand, particularly for younger and first-time borrowers.