At Rs 157 lakh crore, loan market grows 100% in FY 2017-21

Express press service

BENGALURU: India’s lending market grew aggressively by 100% from FY17 to FY21 at Rs 156.9 lakh crore, according to a report titled “How India Lends” by CRIF High Mark, the main Indian credit bureau. The report said that small personal loans (smaller than Rs 1 lakh in size) led the loan portfolio growth which saw a 49% share of retail and commercial borrowers.

Although the number of active personal loans increased by 2 times, the average borrower balance showed stable growth, indicating a slight increase in low-cost loans. Over the past five years, the retail, microcredit, and commercial loan portfolios have grown by 91%, 157%, and 93%, respectively.

With respect to retail borrowers, almost all product categories including personal loans, home loans, car loans, credit card issuance, consumer durable loans saw volume growth even though the average ticket size of each type of borrowing was uneven. The retail loan portfolio in March 2021 stood at Rs 77.5 lakh crore, a growth of 91% since March 2017.

Small loans (less than Rs 1 lakh) constituted 50% of the personal loan portfolio, dominated by NBFCs. Overall, personal loans grew 2.3x in value between fiscal years 2017 and 2020 and grew 3.8x in volume. Credit card issuance fell 80% QoQ in Q1 FY21, however, the number of new cards exceeded pre-Covid levels in Q4 FY21. The credit cards have total balances of Rs 173,9000 cr and 608.89 lakh cards are in circulation as of March 21, growing by 11.6% in value and 13.5% in volume, according to the report.

Priscilla C. Carnegie