Card spending to reach $27.9 trillion this year : GlobalData
According to the FACE-Equifax Fintech lending trends report, fintech players had disbursed digital loans amounting to Rs 92,267 crores in FY23. Even the number of loans given during FY23 rose to 71 million, a 49% YoY rise from 47.7 million loans doled out in FY22.
India’s growing affinity towards making card payments is set to rise furthermore in the upcoming years. According to payment card analytics from GlobalData, the value of payments made via cards in India registered an annual spike of 26.2% in 2022, and are poised to touch the $27.9 trillion value mark this year. Apart from cards, India is riding high on digital loans as well. As of March 2023, fintech lenders had distributed around 7.1 crore loans worth Rs 92,267 crore.
Moreover, physical cash withdrawals from ATMs are projected to jump a meager 4.6% in comparison this year. Slightly ahead of them are debit card spends, which are expected to inch up by 9.5% in the same period. However, the growth of credit cards has been forecasted at 38.1%. One of the reasons for this is the burgeoning popularity of loyalty programmes and cashbacks offered on credit cards.
Credit demand skyrocketing
According to the FACE-Equifax Fintech lending trends report, fintech players had disbursed digital loans amounting to Rs 92,267 crore in FY23. Even the number of loans given during FY23 rose to 7.1 crore, a 49% YoY rise from 4.77 crore loans doled out in FY22.
Contrary to tier-1 cities taking lead in availing loans, tier-3 cities made up for 40% of all digital loans given out. Tier-2 cities accounted for 35%, while tier-1 cities comprised only 25% of all serviced areas. Maharashtra, Karnataka and UP were amongst the top borrowing states in India. Amidst all loan categories, personal loan ranked the highest, making up 83% of the entire loan volume and 72% of total loan value.
Infact, short-term, instant loans which had a duration of less than 6 months made up 88% of the total disbursement value. But simply because they are readily available is no reason why you should blindly take them. Says Nema Chaya Buch, a Pune-based financial planner, “Instant loans are to be taken only when it is absolutely urgent. Loan amount should not be very high. Check how much is the interest rate charged, assess your credit history, the repayment tenure, and whether it is affordable for you to repay. Know the risk well before taking an instant loan, lest it becomes a very “expensive” affair”.