Fintechs to go slow on small personal loans

Hit by the Reserve Bank of India’s (RBI) decision to raise risk weights on unsecured loans, digital lenders are looking to reduce their exposure to small-ticket personal loans. Anticipating an imminent increase in funding costs, they have scaled down disbursal targets in the sub-Rs 50,000 loans category and are planning to diversify their product portfolio and customer base.

As per industry estimates, 70-75% of the total advances of digital lenders consist of small ticket loans below Rs 50,000.