India’s two-wheeler loan portfolio value rose by 10.6 per cent year-on-year (YoY), while volume increased by 1.6 per cent YoY as of June 2022, said a survey by CRIF High Mark, an RBI-approved credit information bureau.
While domestic sales stood at Rs 134.7 lakh in FY22, a decline from Rs 151.2 lakh in FY21 and Rs 202.2 lakh in FY18. The portfolio outstanding and active loans were at Rs 86.2K crore and 248.1 lakh accounts, respectively, as of June 2022.
Furthermore, the motorcycle segment dominated the two-wheeler market, with sales rising by more than 60 per cent from FY18 to FY21, said the report titled “CreditScape Volume XI—Report on Two-Wheeler Loans”, which attempts to capture the critical trends in the two-wheeler lending market.
Launching the report, Sanjeet Dawar, managing director of CRIF High Mark, said it provides "powerful insights" into broad parameters of the two-wheeler loan market to lenders and policymakers, enabling the credit ecosystem's development. "We could see strong recovery trends, indicative of the sector's resilience in India."
He added that given India’s large middle- and low-income population, subpar market penetration, and inadequate public infrastructure, “two-wheelers offer reliable mobility and function as income enablers for many sections of the population”.
Growth In Originations (Value)
The survey showed 13.5 per cent growth in originations (value) from FY21 to FY22. Similarly, between Q4 FY22 and Q1 FY23, the increase in originations (value) was 8 per cent, and by volume, it was 8.3 per cent. The originations share (value) of ticket size of Rs 75,000 loans has also increased from FY20 to FY22.
Also, the top 10 states contributed 70.9 per cent to originations (value), while the top 33 districts contributed 24.2 per cent between Q1 FY22 and Q1 FY23.
Rural originations (value) increased from FY18 to FY22. Originations share (value) of female borrowers has also increased during the same period, the study said.
Originations share (value) for Uttar Pradesh, Bihar, West Bengal, and Madhya Pradesh increased, while it declined for Maharashtra, Tamil Nadu, Gujarat, Karnataka, Telangana, and Andhra Pradesh from FY18 to FY22.
Age-wise, originations by value and volume are dominated by 26-35-year-olds, followed by 36-50 years. On the other hand, the share of female borrowers in originations (value) increased from 15.7 per cent in FY18 to 17.9 per cent in FY22, and by volume, it increased from 14.7 per cent in FY18 to 17.7 per cent in FY22.
Vipul Jain, vice president of product management & business intelligence at CRIF High Mark, said the last couple of years have been challenging for the two-wheeler Industry. Sales declined in FY20-21 and FY21-22 due to a combined effect of savings depletion & income erosion due to the pandemic, an increase in total ownership cost due to the rise in vehicle costs, and a surge in fuel prices.
However, he said the industry is expected to recover to the pre-Covid levels in FY 22-23, supported by the recovery in rural and urban demand due to good monsoon, vaccination coverage & ease of restrictions, improving consumer sentiment, and increasing interest in electric two-wheelers.
