22 million Indians applying for new credits every month, says report
Hyderabad: The Indian consumer credit market continues to expand at a rate higher than most other major economies globally with 22 million Indian consumers applying for new credits every month, said ‘A Review of India’s Credit Ecosystem’ report by Experian, a global information services company, and Invest India, the national agency for investment and facilitation.
India’s domestic credit growth has averaged 15.1 per cent from March 2000 to March 2021, primarily driven by retail loans and increasing penetration of credit cards, it said.
Recovery of personal loans has been high in both low (below Rs 1 Lakh) and high (above Rs 5 Lakh) ticket size segments while the recovery in higher ticket size loans is also improving steadily. Unsecured products are experiencing a faster year-on-year growth rate compared to secured loans.
Neeraj Dhawan, Managing Director of Experian India, said: “Consumerism has been growing in the previously untapped semi-urban and rural regions as millennials become the main driving force of the mass market. Technological adoption is steep which has, in turn, created acceptance for new financial tools. The biggest beneficiary of this change is the credit market”.
With the increase in consumerism, the new sanctioned loans have surged between FY18 and FY20 at a cumulative growth rate of 39 per cent. Unsecured loans, being the major contributor, grew at CAGR of 49 per cent, the report said
There has been an increase in expansion of credit to tier 3 and 4 markets for lending. These markets have witnessed a sharp rise in low-ticket high-volume lending products like two-wheelers, entry-level cars, and affordable housing, the report said.
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