Consumer Credit Growth Continues During CY Q32019, Says CIBIL Report

Mumbai, January 16: The rise in consumer credit growth especially concentrated in lending categories such as credit cards and personal loans continues to grow, says finding by TransUnion CIBIL current year (CY) Q3 2019 Industry Insights Report. The continued development of trends witnessed in the first half of the year indicates that consumers are adjusting towards moderating macro-economic conditions. “Flattening demand for large-ticket asset purchases is causing slower asset finance loan originations, while consumers may be increasingly turning to consumption credit products to help finance day-to-day living expenses. This shift in consumer credit demand warrants ongoing monitoring to understand the impact on lender portfolios,” says Abhay Kelkar, vice president of research and consulting for TransUnion CIBIL. 

That said, the overall major consumer lending products grew 13.1 per cent year-on-year(Y-o-Y) in Q3 FY2019. The lending categories which recorded highest growth was credit cards and personal loans of 40.7 per cent and 28 per cent respectively Y-o-Y in Q3 2019. Whereas moderate rates of balance growth were witnessed in auto loans (10.3 per cent), loans against property (11.6 per cent) and home loans (10 per cent) respectively. 

“Our findings suggest the shift toward consumption lending categories is becoming more sustained and is supported by a strong demand for these products. Consumer inquiry volumes for personal loans and credit cards increased significantly over the period, whereas we saw inquiries were broadly unchanged or slightly down for loans against property and home loans,” points out Kelkar.  Region-wise the report noted that growth is no longer concentrated in metro locations. The total balances from rural and semi-urban locations saw a growth of 17.4 per cent Y-o-Y in Q3 2019, while metro and urban areas grew 11.4 per cent Y-o-Y. The increased consumer lending from rural and semi-urban locations indicates a greater focus by lenders on geographical diversity.