Banks and NBFCs in India witnessed an incremental increase in credit disbursed during the two festive fortnights from September 26 to October 25, 2022, reporting 47% growth in applications processed during this time, according to a report by digital lending platform Lentra.
Banks showed a preference towards wooing home loan customers this festive season with interest rate cuts. Even though RBI hiked the policy rate by 50 bps to 5.90 per cent in September, lenders led by the State Bank of India, HDFC, and ICICI, among others slashed the home loan rates this festive season.
Lentra also reported a surge in home loan applications processed this festive season with most of the demand coming from Tier 2 and Tier 3 towns.
According to the report, as many as 50 financial institutions in India, including HDB Financial services, which are serviced by Lentra, have reported a surge in demand for consumer, two-wheeler, travel, and home loans on the back of an uptick in economic activity.
Lentra covers the entire spectrum of a financial institution’s lending needs, including KYC, compliance, onboarding, servicing, and collections among others. In absolute terms, loan origination volumes on Lentra’s platform rose to more than 5 Lakh applications on Dhanteras alone as compared to the same day in 2021, the report said.
As the economy recovers from the pandemic-induced slowdown, attractive financing options extended by banks during the festive season primarily fuelled the demand.
“An additional push was offered by the absence of restrictions, free movement of people, and relaxed travel guidelines, which led to elevated disbursement”, said Sandeep Mathur, Chief Revenue Officer, Lentra.
Karthik Srinivasan, Chief Business Officer, HDB Financial Services Lt, says that the festive season started around Dussehra and picked up good momentum around Dhanteras and Diwali.
“All consumer businesses, such as Consumer Durable Loans, Two Wheelers and Auto Loans as well as consumption loans exceeded 2019 festive season volumes. It was also well spread around the 7 – 8 days, rather than sharp spikes around 2- 3 critical days, which is a true reflection of demand stabilising to normalcy post-pandemic period,” said Srinivasan.