‘A festive growth close to 100% of personal loans over 4 years’

Personal Loans outpaced all other loan products by registering nearly 100% growth during the festive season (October to December period) from Rs 75,088 crore in FY19 to Rs 147,236 crores of rupees during the financial year 22.

Additionally, personal loans saw their number of originations (volume) quadruple from 39.9 lakh accounts in FY19 to 158.1 lakh accounts in FY22, according to CRIF High Mark, a credit bureau. Significantly, the growth came despite the Covid pandemic that has ravaged the country for the past two years.

Home loans saw 40% growth in originations (value) during the festive season from Rs 138,544 crore in FY19 to Rs 193,227 crore in FY22, and a 21% growth in creations (volume) from 6.7 lakh accounts in FY19 to 8.1 lakh accounts in FY22, it said. The total outstanding amount of personal loans was Rs 33.06 lakh crore in February 2022, according to RBI data.

According to the CRIF report, South and West India dominated in granting new loans. Among the top 10 states, origins (value) were highest in Maharashtra for auto, personal, durable, and home loans, and in Uttar Pradesh for two-wheeler loans. Of the top 15 districts, most are located in the south and west of the country, with Jaipur, NCR and Kolkata being the exceptions. Originations (value) were highest in Bangalore for all products, with home loans and personal loans dominating, followed by auto loans and consumer durable loans.

Navin Chandani, MD and CEO, CRIF High Mark, said, “Our data from FY19 to FY22 shows that the lending industry is driven by strong demand for key consumer products during the holiday season. This continues to be the preferred time to make large, high-value purchases.

There was an increase in the share of originations (value) of PSU banks and NBFCs between the third quarter of FY19 and FY22. Private banks experienced a decline over the same period. However, PSU banks saw a decline in origination (volume) share, while private banks and NBFCs saw an increase over the same period.

CRIF said there was an increase in origination share (both in value and volume) of private banks from the third quarter of FY19 to FY22, while PSU banks and HFCs have seen a decline over the same period.

Consumer durable loans saw 32% growth in originations (value) from Rs 19,683 crore in FY19 to Rs 26,075 crore in FY22, and 33% growth in originations (volume) from 91 .6 lakh accounts in FY19 to 121.9 lakh accounts in FY22. There was an increase in the origination share (both in value and volume) of private banks from the third quarter of FY19 to FY22, and even though the category is dominated by NBFCs, it there is a decline on their part

He said that two-wheeled loans saw stable growth in creations (value) from Rs 16,393 crore in FY19 to Rs 15,281 crore in FY22 and a 29% decline in creations ( volume) from 28.7 lakh accounts in Q3 FY19 to 20.4 lakh accounts in Q3 FY22. There was a decline in origination share (both in value and volume) from Private Banks and NBFC – Captives during the holiday season. NBFC – Others have grown over the same period

Meanwhile, auto loans witnessed a steady growth in origination (value) from Rs 54,367 crore in FY19 to Rs 56,420 crore in FY22. Creations (volume) in Q3 FY19, Q3 FY20 and Q3 FY21 remained above 10 lakh accounts. However, in the third quarter of FY22, it fell to 8 lakh accounts. There was an increase in origination share (both in value and volume) of PSU banks and private banks from the third quarter of FY2019 to FY22, while NBFCs saw a decline .

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