Retail loan demand grows faster in B cities

Business
Retail loan demand grows faster in B cities


MUMBAI: Consumer loan growth is shifting from metropolitan areas and large cities to non-urban areas, with more than 70% of disbursements outside Tier 1 cities. The change will accelerate as reflected by trends in line showing that searches outside cities are growing 2.5 times faster compared to cities.
According to a study by TransUnion Cibil Y Google, loan searches grew the most in Tier 3 cities with 47%, followed by Tier 2 (32%) and Tier 4 (28%). Indian Retail sale the lending industry stood at $ 613 billion (Rs 44 lakh crore), reflecting a compound annual growth rate (CAGR) of 18% since 2017. While home loans at $ 290 billion (Rs 21 lakh crore) ) make up the largest share, property and business loans are the fastest growing.

Digital loans are enabling small loans that are increasing volumes. According to the report, loans of less than 25,000 rupees have multiplied by 23 since 2017. The data shows that those who take out small loans are not less creditworthy. According to TU Cibil in 2020, 38% of loans disbursed at the ‘prime’ credit level were through fintech NBFC (non-bank financial companies).
Furthermore, these fintech NBFCs no longer have only ‘urban youth‘as their primary audience: 70% of disbursements are outside Tier 1, and 78% of customers are millennials (ages 25-45). “Demand and access to consumer credit have undergone a paradigm shift in recent years, and post-pandemic circumstances have further accelerated this shift,” said TU Cibil CEO and CEO Rajesh Kumar.

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