The lending market in India grew to Rs 174.3 lakh crore in March 2022, up by 11.1 per cent on an annual basis, as compared to March 2021.
As of March 2022, commercial, retail, and microfinance lending portfolios contributed 49.5 per cent, 48.9 per cent, and 1.6 per cent, respectively. After the unprecedented challenges on account of the covid 19 pandemic in both FY 2021 and Q1 FY 2022, the lending landscape in India has shown remarkable recovery for the remaining part of FY 22, credit bureau CRIF High Mark said in its second edition of the report, How India Lends.
The report highlighted the performance of major product categories from FY 21 to FY 22, sector-wise.
Retail Loans:According to the report, personal loans grew 46 per cent by value, and 122 per cent by volume between FY 2021 and FY 2022.The sector remained dominated by public sector banks, private banks and non-banking financial companies (NBFCs).
That said, there was 33.6 per cent reduction in the average ticket size of personal loans from Rs. 1.25 lakh in FY 2021 to Rs. 83,000 in FY 2022. There was also a 31 per cent drop in terms of originations in Q1 FY 2022 due to the second wave of covid, but there was recovery in originations from Q2 FY22 onwards. In terms of originations (by value), the Q4 FY22 figures were 33 per cent higher than the corresponding figures in Q4 FY 2021, the report said.
Credit Cards saw 48 per cent growth in new card originations, with the share of the new card originations of private banks increasing from 61.2 per cent in FY 2021 to 71.4 per cent in FY 2022.There was, however, 26.5 per cent drop in new cards issued in Q1 FY 2022 due to the second wave of covid, but it recovered soon enough. Overall, new cards issued in Q4 FY22 were 28 per cent higher than in Q4 FY 2021.
Two-wheeler loans grew by 9.2 per cent in terms of value and 2 per cent in terms of volume, and the sector was dominated by NBFCs and private banks, the report said.Auto loans grew by 23 per cent and 8.5 per cent by value and volume, respectively. Private and public sector banks, as well as NBFCs showed good presence in this sector, the report said.
Business and consumer loans grew by 10 per cent and 66 per cent in value, respectively. The former was dominated by public and private banks and NBFCs, while the latter was dominated by NBFCs. Consumer loans grew 43 per cent by volume, the report added.
Home Loans:Home loans grew by 29 per cent by value and 20 per cent in volume, and the sector was dominated by public sector banks and housing finance companies (HFCs). Both the portfolio outstanding as well as the active lending sector was dominated by public banks and HFCs. Public banks accounted for 44.3 per cent of the active loans and HFC, 36.6 per cent, according to the report.
The average ticket size for home loans also increased 7.7 per cent from Rs 28.4 lakh in FY 2021 to Rs 30.6 lakh in FY 2022. Though there was a 50 per cent drop in new originations in terms of value due to the second wave of covid, there was recovery from Q2 FY 2022 onwards, the report said.
Microfinance Loans: Microfinance loans grew by 22 per cent in terms of value and 13 per cent in terms of volume. The sector was dominated by banks and NBFC microfinance institutions (MFI), the report said.
Commercial Loans:Commercial loans saw the maximum growth at 73 per cent by value during the period, with the sector being dominated by private and public sector banks.
Sanjeet Dawar, managing director, CRIF High Mark, says: “India’s credit sector maintained an accelerated growth trajectory despite unprecedented challenges arising due to the second wave of covid-19. The lending market in India stood at Rs.174.3 lakh crore, growing by 11.1 per cent over last year. As a result, FY 2022 witnessed tremendous growth in new loan originations across retail, microfinance, and commercial loans. This resurgence in the credit landscape signals economic recovery and is extremely encouraging.”
