Increasing economic activity leads to growth in the credit market

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With the active implementation of various government policies and companies in the ecosystem, the performance of the credit market in India has improved. Retail credit portfolio balances in June, 2022 showed a good recovery across all products, with year-on-year growth of up to 15 per cent in home loan balances, up to 13 per cent in auto loans, up to 61 per cent in consumer durables loans, up to 32 per cent in credit cards and up to 29 per cent in personal loan balances. has happened The Indian credit market indicates a high recovery with improvement in credit performance and positive creditor sentiment. Lending performance has steadily increased year-on-year with generally low levels of delinquency. It is time for lenders to identify and reach out to the most qualified consumers across India and provide them with easy and quick credit along with a positive experience.

The share of the Indian youth generation in new credit products has steadily increased over the past two years. In June 2022, one-third of originations (33 percent) occurred among consumers aged 18 to 30, up from 22 percent in 2020. Similarly, sub-prime borrowers stood at 32 percent compared to 28 percent in the second quarter of 2019, indicating lenders' eagerness to increase access to credit among a wider segment of consumers.

Metro areas accounted for 23 percent of originations among consumers in June 2022, up from 25 percent in 2019, with the percentage of originations in non-metro areas increasing by 24 percentage points over the past three years.

More young people and more people applying for credit in non-metro areas. Lengthy approval processes and other negative experiences can lead consumers to drop out of the application process or switch to other more convenient lenders. While identity verification and fraud prevention measures are an important part of any loan application process, this balances against streamlining the process and getting a quick response to applications. Lenders that enable properly balanced risk management and customer experience will be well-positioned to succeed in this competitive market.

Growth observed in the credit market

Product

value

Home Loan

15%

Loan against property

6%

Auto Loans

13%

Two wheeler loan

6%

Personal Loan

29%

credit card

32%

Consumer durable loan

61%

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