Retail loan originations rose 15% year-on-year(y-o-y) in the second quarter of 2023 as consumption-led demand remained strong, TransUnion CIBIL said in a report.
“The latest CMI indicates financial stability with healthy retail credit growth and broadly stable delinquency levels, even though a few pockets show signs of risk build-up,” TransUnion CIBIL Managing Director and Chief Executive Officer Rajesh Kumar said, adding that India’s large young population, and low credit penetration in the new-to credit segment, provide huge untapped potential for accelerating credit growth and financial inclusion.
The report has been prepared on the basis of credit market indicators. These are a measure of data elements that are measure of data that are summarised on a monthly basis to analyse in credit market health.
These indicators include demand, supply, consumer behaviour, and performance.
Personal loan origination volumes rose 22% y-o-y in April-June, the highest among categories, data from TransUnion CIBIL showed. In terms of value, personal loan originations rose 12% y-o-y. Similarly, consumer loan originations rose 20% y-o-y in terms of value, and 13% y-o-y in terms of volume.
Additionally, two-wheeler loans and property loans also witnessed a strong growth in originations.
Originations are a measure of new accounts opened.
Consumers up to an age of 35 constitutes 51% of originations. Metros comprise around 22% of volumes, whereas rural and semi-urban areas constitute 59% of volumes.
Prime, and above prime customer segments comprise 56% of loan originations. The new-to-credit segment comprised 15% of originations as on June 30, lower than 19% a year ago. Similarly, loan approval rates to the new-to-credit segment fell 23% as on June 30 from 29% a year ago.
In recent times, RBI has expressed concerns over the risks associated with the unsecured loan portfolio of the overall banking industry.
Overall balance-level serious delinquencies, measured as 90 days or more past due improved across product categories, barring credit cards and personal loans. The delinquency rate of loan against property was relatively higher at 2.18%.