Fintech firms’ small ticket personal loan defaults rose to 6.4% in March from a little over 4% in March 2024 signalling potential asset quality risks, according to Reserve Bank of India’s Financial Stability Report (FSR) June 2026.

Small ticket loans refer to borrowings less than ₹50,000. Delinquent loans are defined as loans that are due for payment for 90-170 days.

Unsecured retail loans constitute about 70.5% of fintech firms’ loan books and about half of them were extended to borrowers under 35 years of age. Banks and non banking finance companies (NBFCs) enjoyed a large market share in small ticket personal loans earlier but in recent years, the market has been mostly dominated by fintech firms. An overwhelming share of Indian small borrowers resort to loan apps, mostly due to loan accessibility. 

Fintech forms now control more than half of the small ticket personal loan market followed by NBFCs which have a smaller but substantial 30.7% of such loans. Banks had more than 20% of the market in March 2024 and this number has come down to just 10% as of March 2026. 

These small value loans increased 41.6%  in fintech firms as of March 2026, from less than 15% in the same period last year. Meanwhile banks have reduced such small lendings by 30.8% in March 2026. While these loans are of small value, their proliferation and increasing default risk keeps the regulator concerned, going by the FSR. 

The gross non-performing asset ratio (GNPA) of NBFCs as a whole is expected to increase to 2.8% of all outstanding loans by March 2027, from the 2.4% in March 2026. Of the 174 NBFCs that underwent the stress test, seven of them may fall short of the 15% minimum capital requirement and this is will increase to 15 companies at higher levels of stress, the RBI said.