Raising concern over the role played by fintech firms on unsecured lending, the Reserve Bank of India (RBI) pointed out that the impairment among borrowers who have availed such loans from five or more lenders was elevated.

In its Financial Stability Report, the RBI said that unsecured loans formed over 70% of fintechs' total loan book and more than half of them were extended to borrowers under 35 years of age.

Fintech firms have been increasing their footprint in retail lending, which now forms 8.9% of total NBFC (non-banking financial company) consumer segment loans, up from 7.3% in September 2023.

Between September 2024 and September 2025, fintechs registered a robust growth of 36.1%, largely driven by personal loans that formed more than half of their outstanding loan portfolio and are rising both in terms of value and volume, the report said.

In terms of asset quality, the RBI said that the impairment of personal loans in the fintech firms portfolio has declined over the last one year even as credit has expanded rapidly.

“Compared to other non-banking financial companies (NBFCs), however, the impairment in the small ticket loans were relatively higher,” the report said.