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<ul><li>Corporate loan growth originations grew in lower single digits in FY23.</li><li>Investment announcements in 2023 were at their lowest since 2018, excluding 2020.</li><li>Auto, home and other consumption loans saw sharp growth, led by <keyword id="20026653" type="General" weightage="20" keywordseo="personal" source="keywords">personal</keyword> loans. </li></ul>Large corporates are still not driving India’s credit growth as private capital expenditure is yet to pick up pace. While consumption, MSME and microfinance loans’ originations volume grew in double digits between FY22 and FY23, corporate loan growth was at a mere 2.4%, as per <keyword id="19994500" type="General" weightage="20" keywordseo="crif" source="keywords">CRIF</keyword> High Mark’s report on ‘How India Lends’. Investments by companies have remained in the slow lane even in FY24, according to a report by <keyword id="19920717" type="General" weightage="20" keywordseo="bank-of-baroda" source="keywords">Bank of Baroda</keyword>. In the first three quarters of FY24, investments to the tune of ₹10.80 lakh crore were announced. Most of these announcements were dominated by airlines, power, chemicals and machinery. Bank of Baroda in a report said that 2023’s investment announcements, most of which might not materialize, are at the lowest since 2018. That however excludes 2020, when Covid-19 induced lockdown was in-effect. “Data on new investment announcements do indicate that industry in general is still in a wait and watch mode. One factor holding back investment could be excess capacity in several sectors. <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> data for June shows the average at 73.6%,” said economists at Bank of Baroda. Apart from this, uncertainty due to the elections could have played a role in companies being tight fisted. “The third factor could be high interest rates and the expectation of repo rate cuts next year in the second quarter of the fiscal,” the economists added. The consumption loan boom On the other hand, consumption loans that include home loans, auto loans, personal loans etc, grew the fastest at 37.7% in FY23. Within consumption, personal loans saw the sharpes growth, followed by consumer durable loans. Public and private sector banks give a large chunk of home loans. “There is a 22% increase in average ticket size (ATS) from ₹20.2 lakh in FY20 to ₹24.7 lakh in FY23. There has been a shift in originations by both value and volume seen from ticket size ₹5-35 lakh to ₹35-75 lakh,” said CRIF. Housing finance companies and PSU banks lead ticket size bands under ₹75L, while private banks lead the over ₹75 lakh ticket size loan market. Loan origination growth (FY22 to FY23) <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Consumption Loan Type </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Portfolio size </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Origination value growth </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Origination volume growth </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Home Loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹30.7 lakh crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">18.1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Personal Loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10.9 lakh crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">35.2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">50.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Two-Wheeler Loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1.1 lakh crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">50.3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">35.3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Auto Loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5.9 lakh crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Consumer Durable Loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹0.5 lakh crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">32.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37.5% </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: CRIF *Portfolio as of June 2023 Fintechs lead personal loan growth Personal loans are dominated by public sector banks and private banks by value; and NBFCs by volume. Loan originations grew twice over in both value and volume from FY20 to FY23. “Fintechs lead the growth in small ticket and small tenor loans. Their share in originations volume for ticket size under-₹25,000 loans went up to 75% in FY23 from 67% in FY20,” said CRIF. MSME and microfinance loan originations volume grew 20.8% and 16.6% respectively, as per the CRIF report. "MSME lending experienced substantial percentage growth in originations by value, with the micro segment being the largest contributor. These trends, combined with an encouraging improvement in delinquencies, thus, reflect the resilience of the Indian economy,” said <keyword id="20372020" type="General" weightage="20" keywordseo="sanjeet-dawar" source="keywords">Sanjeet Dawar</keyword>, MD of CRIF High Mark.

India’s corporates in ‘wait and watch’ mode as consumption loans zoom

<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s <keyword id="23127366" type="General" weightage="20" keywordseo="consumption-loan" source="Orion">consumption loan</keyword> portfolio grew by 15.2% year-on-year (YoY) to Rs 90.3 lakh crore as of March 2024, according to the latest <keyword id="6354680" type="General" weightage="20" keywordseo="credit" source="Orion">credit</keyword> bureau report. The fourth edition of the CRIF High Mark report noted a slowdown from the 17.4% growth recorded in March 2023, largely due to a deceleration in the home <keyword id="6362287" type="General" weightage="100" keywordseo="loans" source="Orion">loans</keyword> segment, which accounts for 40.1% of the overall consumption loan portfolio by value. The home loans portfolio saw growth slowing down to 7.9 % YoY in FY24, from the 23 % expansion seen in FY23. This was mainly due to muted growth in "originations", which increased by 9.2 % in FY'24 compared to 18.2 % in the previous fiscal year. Origination refers to the process by which a lender creates or initiates a new loan or credit, including evaluating, processing, and approving a borrower's application. The report finds a shift toward higher <keyword id="6871589" type="General" weightage="20" keywordseo="ticket-size" source="Orion">ticket size</keyword>s, with a growing preference for loans above Rs 35 lakh, although the average ticket size (ATS) rose by 32% from Rs 20.1 lakh in FY20 to Rs 26.5 lakh in FY24. In contrast, the personal loans segment maintained strong momentum, growing by 26% YoY in FY24, despite recent regulatory reforms. Larger ticket loans of Rs 10 lakh and above increased their share in originations by value, while loans under Rs 1 lakh continued to dominate in volume. Banks led in value-based originations, whereas non-banking financial companies (NBFCs) remained dominant in volume. Two-wheeler loans experienced a 34% YoY growth in FY24, up from 30% in FY23, fueled by a shift to higher ticket-size loans. However, the overall volume of originations grew at a slower pace of 13% in FY24 compared to 32% in FY23. <keyword id="35527" type="General" weightage="20" keywordseo="auto-loans" source="Orion">Auto loans</keyword>, on the other hand, grew by 20% YoY in FY24, compared to 22% in FY23. Consumer durable loans posted a robust growth of 34% YoY in FY24, up from 26% expansion in the previous fiscal. This growth was driven by a shift to larger ticket sizes, although origination volumes grew by only 8.5% in FY24, compared to 38.2% in FY23. The MSME lending segment displayed mixed results, with individual MSME loans growing faster than entity MSMEs. The individual MSME portfolio increased by 29% YoY in FY24, accelerating from 15% in FY23, while entity MSME loans grew by just 6.6 % YoY, a sharp slowdown from 17.2 % in the previous year. Microfinance lending also saw strong growth, with the portfolio rising by 27% YoY in FY24, compared to 21% in FY23. "The resilience of the Indian credit market is evident in the strong performance across various lending categories and the stability in delinquencies. Home loans remain dominant, but the growth in personal loans, two-wheeler loans, and the rebound of NBFCs highlight significant shifts in the lending landscape," CRIF High Mark MD Sanjeet Dawar said.

Consumption loan portfolio expands 15% to Rs 90 lakh crore in FY24, notes CRIF report

<ul><li>A <keyword id="524374" type="General" weightage="20" keywordseo="credit-report" source="Orion">credit report</keyword> is a very important document that gives a complete picture of your financial behaviour and good score can benefit borrowers in many ways. </li><li>It is advisable to check your credit report regularly, and as a best practice to review it on a monthly basis. </li><li>In the event you spot errors in your credit report, please reach out immediately to the <keyword id="680685" type="General" weightage="20" keywordseo="credit-bureau" source="Orion">credit bureau</keyword> from where you have pulled your report, requesting for a correction. </li></ul>A <keyword id="6380214" type="General" weightage="20" keywordseo="credit-score" source="Orion">credit score</keyword> is an individual’s credit report card and it determines not only eligibility but also the rate of interest you pay. It helps the lender gauge whether you can repay it or not. Lenders check your credit score and your credit report before deciding anything. Oftentimes, a loan that has been closed can also reflect on the credit report and sometimes a dispute with a lender can also affect your credit score. Consumers should monitor their scores and rectify errors say financial experts. “The credit report is a very important document that gives a complete picture of your finances exactly as the lender sees it,” says Adhil Shetty, CEO, BankBazaar. <cmsannotation type="cmsannotation" annotationid="Why your credit report matters" comment="subhead" text="Why your credit report matters">Why your credit report matters</cmsannotation> The credit report is an indicator of your ability to manage your financial life. It tells the lender how disciplined you are in handling credit as well as indicates your ability to repay any credit you have availed. It also provides a clear picture of all your existing liabilities. “All this enables the lender to make an informed decision on whether or not to extend further credit to you, and the terms and conditions at which it should lend,” says Shetty. Your credit report contains the details of current and closed loan accounts; account opening and closing dates and account status; your payment history; your outstanding balance; all the account details listed, especially the payment history; credit enquires; and your lenders’ details among other things. “An <keyword id="6420079" type="General" weightage="20" keywordseo="error" source="Orion">error</keyword> in any of this data can have a big impact on your credit worthiness. Today, the credit score is directly linked to the interest rate,” says Shetty. If you have a good score, you can get the best rates in the market. However, if your score is poor, you may not be able to get a loan despite meeting all other eligibility criteria or be given a loan at a higher rate of interest. So it is essential that you check your credit report and your credit score on a regular basis. <cmsannotation type="cmsannotation" annotationid="How often should you check your credit report" comment="subhead" text="How often should you check your credit report">How often should you check your credit report</cmsannotation> In spite of due diligence done by banks and NBFCs, errors can creep into your credit report. Apart from errors related to personal details, other errors like days past due date, reporting of overdue amounts and so on can get reflected in your credit report and this would affect your credit score. “It is advisable to check your credit report regularly. A best practice is to review the reports on a monthly basis. This practice aids in identifying unusual activities or errors that might negatively affect your credit score,” says Sanjeet Dawar, managing director, CRIF High Mark, a RBI-licensed credit bureau. Keeping a close eye on your credit report can help you maintain a healthy financial profile. <cmsannotation type="cmsannotation" annotationid="How to correct errors if any" comment="subhead" text="How to correct errors if any">How to correct errors if any</cmsannotation> “In the event you spot errors in your credit report, please reach out to the credit bureau from where you have pulled your report immediately, requesting a correction. Raise a dispute with the credit bureau to initiate the process. It is also advisable to simultaneously connect with the lender in case of an error related to a specific credit line,” says Dawar. The credit bureau is not authorised to make any changes to the credit information report (CIR). “All disputes are sent to the reporting financial institution, which ascertains if the dispute is legitimate. The changes have to be authenticated by the concerned financial institution, following which, the credit report can be updated,” says Shetty. This process may take some time. “Once this is done, the bureau typically requires up to 30 days to resolve the issue. If the investigation confirms the error, you will then be provided with a revised report,” says Dawar. Make it a habit of checking your credit score on a regular basis, and if you find it has changed drastically, it is important to check your credit report and request for corrections if any.

Unhappy with your credit score? Here’s how you can check for errors and rectify

<ul><li>Indians are taking more personal and <keyword id="1897540" type="General" weightage="20" keywordseo="consumer-durable-loans" source="Orion">consumer durable loans</keyword>, boosting the overall growth of retail credit in the country.</li><li>Personal and consumer durable loans almost doubled between FY19 and FY22, despite a lull for two years due to Covid-19.</li><li>Tier 2 and lower cities and districts have joined the party, with home loans seeing a surge in these areas due to WFH.</li></ul>Indians are taking more <keyword id="35520" type="General" weightage="100" keywordseo="personal-loans" source="Orion">personal loans</keyword> and buying consumer products on credit than ever before, according to a new report by credit bureau <keyword id="2509365" type="General" weightage="80" keywordseo="crif-high-mark" source="Orion">CRIF High Mark</keyword>. Personal loans, consumer durable loans and business loans carry relatively higher risk for lenders, when compared to home and auto loans. Despite this, personal and consumer durable loans grew at a high CAGR of 25% between FY19 to FY22 – almost doubling in this period, according to a report by Kotak Institutional Equities. Overall, the total lending market in India stood at ₹174.3 lakh crore in FY22, with the retail segment accounting for 48.9% of it. While the overall lending market grew 11.1% in FY22, it has capped off the sluggish growth in FY20 and FY21 – two years highly impacted by Covid-19 and the lockdowns. “FY22 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,” said Sanjeet Dawar, Managing Director, <keyword id="2302542" type="General" weightage="20" keywordseo="CRIF" source="Orion">CRIF</keyword> High Mark. <cmsannotation type="cmsannotation" annotationid="Economic recovery sounds good, so why are personal loans surging?" comment="subhead" text="Economic recovery sounds good, so why are personal loans surging?">Economic recovery sounds good, so why are personal loans surging?</cmsannotation> An economic recovery sounds like a positive development, but the surge in personal and consumer durable loans might also be hinting at another problem. A surge in these two loan segments suggests people are conserving cash, so they are taking loans and buying products on EMIs to ensure they have enough liquidity. On a positive note however this also suggests two other things – there is a revival in consumer demand, and that people are optimistic about their cash flows, giving them the confidence that they can repay loans on time. “Early warning indicators are at a comfortable level today across all loan segments. Delinquency levels in high-risk segments like consumer durables, personal loans and credit cards are also at a comfortable level today, indicating no reason to be concerned today,” the Kotak report added. This means that both lenders and borrowers are placed securely, and overdue loans are within a comfortable range. <cmsannotation type="cmsannotation" annotationid="Revenge shopping is adding to the surge – and Tier 2+ cities are joining the party" comment="subhead" text="Revenge shopping is adding to the surge – and Tier 2+ cities are joining the party">Revenge shopping is adding to the surge – and Tier 2+ cities are joining the party</cmsannotation> Another factor at play is revenge shopping – lockdowns and Covid-19 restrictions resulted in muted festivities for two years, but everything has opened up in 2022.<a href="https://www.businessinsider.in/business/ecommerce/news/online-festival-sales-likely-to-be-28-higher-than-pre-covid-levels-at-11-8-billion-report/articleshow/94076810.cms"> Experts believe online festival sales could be 28% higher</a> than pre-Covid levels, which suggests that people are itching to shop. Joining the party are people from Tier 2, 3 and 4 cities. “We are forecasting 4x growth in the number of online shoppers from 2018. This growth has been driven by accelerated digital adoption and increasing penetration in Tier 2+ cities,” said Sanjay Kothari, associate partner, Redseer Strategy Consultants. Better yet, this surge is not limited to personal or consumer durable loans – home loans, which have much higher ticket sizes and are relatively less risky than personal loans, have also seen an increase in T3 and T4 districts. According to a<a href="https://www.businessinsider.in/finance/news/home-loans-growing-at-a-faster-rate-in-tier-3-and-4-districts-thanks-to-wfh-sbi-report/articleshow/94393267.cms"> report by SBI</a>, T3 and T4 districts account for 36% of fresh disbursals in FY22, up from 32% in FY19 – thanks to a boom in Work from Home, freelance jobs, and a renewed focus on work-life balance. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/credit-suisse-is-in-trouble-but-this-is-not-2008-investors-remain-wary-of-the-all-is-well-soundbites/articleshow/94641570.cms">Credit Suisse is in trouble, but this is not 2008 – investors remain wary of the ‘all is well’ soundbites</a> <a href="https://www.businessinsider.in/business/auto/news/auto-sales-remain-buoyant-in-september-with-reports-of-a-good-festive-season-ahead/articleshow/94622721.cms">Auto sales remain buoyant in September with reports of a good festive season ahead</a> <a href="https://www.businessinsider.in/stock-market/news/heres-all-you-need-to-know-about-suzlon-energys-1200-crore-rights-issue-after-founder-tulsi-tantis-death/articleshow/94617068.cms">Here’s all you need to know about Suzlon Energy’s ₹1,200 crore rights issue after founder Tulsi Tanti’s death</a>

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India’s corporates in ‘wait and watch’ mode as consumption loans zoom

Katya Naidu

Consumption loan portfolio expands 15% to Rs 90 lakh crore in FY24, notes CRIF report

PTI

Unhappy with your credit score? Here’s how you can check for errors and rectify

Anagh Pal

Indians are taking more personal loans, buying consumer goods on credit, says report

Rounak Jain

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