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

Authors

DOI:

https://doi.org/10.55955/210001

Keywords:

FinTech, FinTech company, Conventional lending, Fintech Credit

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.

References

Arner, D. W., Barberis, J., & Buckley, R. P. (2015). The Evolution of Fintech: A New Post-Crisis Paradigm?. Journal The HKU Scholars Hub, The UniversityOf HongKong. 1–45. http://ssrn.com/abstract=2676553http://ssrn.com/abstract=2676553 DOI: https://doi.org/10.2139/ssrn.2676553

Bazarbash, M., & Beaton, K. (2020). Filling the Gap: Digital Credit and Financial Inclusion. IMF Working Papers, 2020(150), 30. https://www.elibrary.imf.org/view/journals/001/2020/150/article-A001-en.xml DOI: https://doi.org/10.5089/9781513552477.001

Buch, C., & Drages, B. G. (2018). Structural changes in banking after the crisis. In CGFS Papers (Issue 60). https://www.bis.org/publ/cgfs60.pdf

Dickerson, S, M., & J, S. (2015). The Future of FinTech and Banking: Global Fin Tech Investment Triples In 2014. CBINSIGHTS. https://www.cbinsights.com/research/fintech-and-banking-accenture/

Disemadi, H. S., Yusro, M. A., & Balqis, W. G. (2020). The Problems of Consumer Protection in Fintech Peer To Peer Lending Business Activities in Indonesia. Sociological Jurisprudence Journal, 3(2), 91–97. https://doi.org/10.22225/scj.3.2.1798.91-97 DOI: https://doi.org/10.22225/scj.3.2.1798.91-97

Farnsworth, K., & Irving, Z. (2012). Fiscal crisis, financial crisis, and the great recession. The Routledge Handbook of the Welfare State, 307–318. https://doi.org/10.4324/9780203084229-38 DOI: https://doi.org/10.4324/9780203084229-38

Frost, J., Cornelli, G., & Frost, J. (2022). The Impact of Fintech Lending on Credit Access. 1041. DOI: https://doi.org/10.21799/frbp.wp.2022.14

Goh, C. (2022). Record high APAC fintech funding in 2021 paves way for more M&A | S&P Global Market Intelligence. https://www.spglobal.com/marketintelligence/en/news-insights/research/record-high-apac-fintech-funding-in-2021-paves-way-for-more-ma

Group Committee on the Global Financial System (CGFS). (2017). FinTech Credit (Issue May).

Helleiner, E. (2011). Understanding the 2007-2008 global financial crisis: Lessons for scholars of international political economy. Annual Review of Political Science, 14, 67–87. https://doi.org/10.1146/annurev-polisci-050409-112539 DOI: https://doi.org/10.1146/annurev-polisci-050409-112539

Le, T. D. Q., Ho, T. H., Nguyen, D. T., & Ngo, T. (2021). Fintech Credit and Bank Efficiency: International Evidence. International Journal of Financial Studies, 9(3), 44. https://doi.org/10.3390/ijfs9030044 DOI: https://doi.org/10.3390/ijfs9030044

Omarini, E. (2018). Peer-to-Peer Lending: Business Model Analysis and the Platform Dilemma. International Journal of Finance, Economics and Trade, 2(3), 31–41. https://doi.org/10.19070/2643-038x-180005 DOI: https://doi.org/10.19070/2643-038X-180005

Reddenklau, A., Adesman, L., Anhesini, R., & Burness, S. (2022). Pulse of Fintech H1’22 (Issue September). https://home.kpmg/xx/en/home/insights/2022/08/pulse-of-fintech-h1-2022-global-insight.html

Subbarao, D. (2009). Impact of the Global Financial Crisis on IndiaCollateral Damage and Response. 1–14.

Thakor, A. V. (2020). Fintech and banking: What do we know? Journal of Financial Intermediation, 41, 100833. https://doi.org/10.1016/j.jfi.2019.100833 DOI: https://doi.org/10.1016/j.jfi.2019.100833

Wolfe, B., & Yoo, W. (2017). Crowding Out Banks: Credit Substitution by Peer-To-Peer Lending. SSRN Electronic Journal, 716. https://doi.org/10.2139/ssrn.3000593 DOI: https://doi.org/10.2139/ssrn.3000593

Aarti Goswami, Pramod Borasi, & Vineet Kumar. (2021, October). FinTech Lending Market Size, Share &Analysis | Trends - 2030.

Downloads

Published

26-01-2023

Issue

Section

Articles

How to Cite

Jhariya, P., Kushwaha, N., & Puntambekar, G. (2023). AN ANALYSIS OF CREDIT GROWTH THROUGH TRADITIONAL BANKS AND FINTECH COMPANIES IN INDIA. Sachetas, 2(1), 1-10. https://doi.org/10.55955/210001

Plaudit