Credit growth is essential to drive the next phase of India’s economic expansion yet there’s more room for credit to grow, according to Pine Labs Founder Amrish Rau, while Peak XV investor Shailendra Singh cautions that it must be managed responsibly to avoid potential pitfalls.
“I still believe that Indian consumer hasn’t really adopted to credit, and hasn’t adopted to credit to help personal growth, economic growth, personal growth, consumption growth…and as we start to see Indian consumer use credit to better their own lives and the ecosystem around them, I think Indian economy will benefit,” Rau said during a panel discussion on the future of fintech at the Global Fintech Fest in Mumbai.
However, PeakXV’s Singh believes that credit growth must be approached with caution. “As we have seen recently, people get credit and then do real money gaming—that’s pretty scary. People are using credit to do futures and options online. That’s pretty scary. And then we don’t want people falling into a consumption trap like in certain parts of the world,” he added.
During FY23-24, fintech and digital lending firms in India processed and sanctioned over 10 crore loans, with total disbursements amounting to Rs 1,46,517 crore, according to a report by the Fintech Association for Consumer Empowerment (FACE) released in June this year.
The report noted a year-on-year growth of 35% in disbursement volume and 49% in disbursement value, with 10.19 crore loans disbursed totalling Rs 1,46,517 crore in FY23-24. The average loan size during this period was Rs 12,648, compared with Rs 11,094 in the previous year.
In the fourth quarter of FY23-24, member companies disbursed 2.69 crore loans worth Rs 40,322 crore, with an average loan size of Rs 13,418. This represents a 3% growth over the third quarter of FY23-24, as reported by FACE.
However, Dilip Asbe, MD and CEO of National Payments Corporation of India (NPCI), believes that a UPI-like ecosystem can be a solution. “The way payments have transformed, I think the credit has to transform all by itself, using the DPI,” Dilip said.
He mentioned that the main hurdle with ramping up credit responsibly, collections, can be made easier through an end-to-end life cycle product where banks have more control over the loans being disbursed.
During the event, Singh also emphasised that fintech is fundamentally a business of precision, not speed. In his view, many tech founders who venture into the financial services space often misapply the principles of technology startups—such as rapid scaling and aggressive fundraising—to a domain that requires meticulous attention to detail and careful planning.
Financial services are inherently different from traditional tech industries; they necessitate a multi-decade horizon for growth and stability. Unlike the “winner-takes-all” dynamics often seen in tech, fintech operates under stringent regulatory oversight, which fosters a diverse market with multiple participants. This ensures that consumers, merchants, and other stakeholders are well-served through healthy competition.
Singh argued that fintech companies should avoid the pitfalls of blitz scaling and instead focus on building thoughtfully with balanced strategies. According to him, the key to success lies in developing a precise and compelling value proposition, supported by strong underwriting discipline, sharp execution, and a relentless focus on quality over quantity.
