There has been a surge in home loan and personal loan disbursements during the year ending December 2022, according to a report by Equifax and Andromeda.
The study, Indian Retail Loans Overview-April 2023, found that a total of 34 lakh home loans, worth Rs 9 lakh crore, were disbursed during the January-December 2022 period, showing an annual growth of 18 per cent.
The less than Rs 25 lakh ticket size category accounted for the maximum number of disbursals, with a growth of 67 per cent over the preceding year. Incidentally, this happened despite a dip reported earlier in the affordable housing sector.
“Telangana witnessed the highest growth of 29 per cent from December 2021 to December 2022,” the report said.
Indian Retail Loans Report
Of the total Rs. 100 lakh crore disbursed in the retail loan sector, non-banking financial companies (NBFCs) witnessed the highest growth of 35 per cent followed by private sector banks, which grew by 26 per cent for the same period.
Still, public sector banks continue to lead in terms of total disbursed amount, accounting for 33 per cent.
The report also highlighted the personal loan segment’s impressive growth of 57 per cent during 2022. Retail lending, which was adversely affected during the pandemic, bounced back by registering a 40 per cent growth from the previous year. Retail lenders disbursed 31 crore loans during this period.
The rise in demand for personal loans in India can be attributed to multiple factors, such as the growing consumption-driven demand, the ease of availing loans, and the competitive landscape among lenders.
The reason for this is also due to the fact that despite recent increases in Reserve Bank of India (RBI) policy rates, personal loan interest rates have not risen as much as home loan interest rates, according to V Swaminathan, executive chairman of Andromeda Sales and Distributions Pvt. Ltd.
An analysis by Andromeda Loans a month back had showed that the average loan amount taken by people living in metros increased from Rs. 8 lakh to Rs. 12 lakh per individual.
Large cities like Ahmedabad or Indore saw increases in loan amounts and number of applicants, while Tier-III and Tier-IV cities had increased applicants, while the loan size remained the same.
The lower-income groups took longer to adjust to the rate hike, the report said, adding that the dip in demand for affordable housing was attributed to this along with other supply-side constraints and building material costs.
