Mumbai, December 17: When it comes to the retail loan book of financiers in India, it is expected to double to Rs 96,00,000 crore by March 2024 as compared to the current Rs 48,00,000 crore in March 2019, says one report. The report named ‘Mining the Golden Opportunity in Retail Loans’ by ICICI Bank powered by CRISIL provides in-depth insights into growth drivers of each retail asset class and outlines the major economic interventions that is expected to drive the retail loans market.
The report highlights that the rapid growth is going to augment in the next five years on the back of increased demand for private consumption, as well as consumers’ willingness to take loans, easy availability of various consumer data coupled with improved usage of data analytics and increased regulatory measures. Commenting on the same, Anup Bagchi, Executive Director, ICICI Bank explained, “India’s GDP per capita in terms of Purchasing Power Parity (PPP) is now $7,762. Our analysis predicts that this junction will prove to be an inflection point for the country, as it was with another large economy a few years ago. We foresee that in the next five years, the domestic retail loans market is poised to double to Rs 96,00,000 crore.
The report also added that given the positive shift towards higher-yield unsecured lending, the systemic profitability is expected to remain steady. The mortgage loans market which includes normal and low cost housing and loan against property is expected to double to Rs 46,10,000 crore in FY24. Further the unsecured loans which includes personal loans and credit cards is expected to more than double to Rs 13,80,000 crore in FY24 finds out research report. Having said that, the new private banks entering the competition, is expected to increase their market share from their public sector peers.
The entrance of new types of players in the market targeting specific segments is also in line with the global trends explains the report. “Growth is expected to be higher in smaller cities outside the top 50 cities. We expect players with a strong funding franchise, distribution heft, superior underwriting skills, strong focus on technology and balanced mix of secured and unsecured loans to be ahead of the pack in the retail loans sweepstakes,” added Amish Mehta, Chief Operating Officer and President, CRISIL.