Consumer lending grows 64 pc during pandemic

Chennai: Consumer lending has witnessed a resurgence after the pandemic with personal loans and gold loans doubling the portfolio.

Consumer lending has seen the portfolio size growing by 64 per cent between March 2020 and September 2023 and PAR 31-180 delinquency too improved 25 per cent from 4.7 per cent to 3.5 per cent. In the consumer lending space, personal loans grew 115 per cent and short-term personal loans saw 204 per cent growth. Gold loans portfolio grew by 121 per cent and credit cards by 76 per cent, according to Crif High Mark.

Maharashtra saw 99 per cent growth in personal loans, Tamil Nadu saw 95 per cent growth and Karnataka witnessed 111 per cent despite a higher base. In terms of personal loans, 2X growth was found in origination value and 2.6X growth in origination volume from FY20 to FY23. In personal loans, digital lenders contributed 7.9 per cent to originations' value and 19.8 per cent to originations volume in FY23. There is a significant increase in originations value share for digital lenders of loans with ticket size above Rs 1 Lakh from FY20 to FY23.

“New-age digital lenders have revolutionized lending through wider reach and innovative products, and now they are also focusing on asset quality and customer selection,” said Sanjeet Dawar, Managing Director, CRIF High Mark.

According to CRIF, growth came from beyond the top 100 cities. Cities beyond the top 100 saw 3.5X growth, while the top 8 cities grew 2.3x growth in terms of loans less than Rs 10k. For loans between Rs 10k and Rs 50k, cities beyond 100 saw 5X growth against 3X growth in the top 8 cities.