MUMBAI: Half of the country’s working population of 400 million people is active in credit, having at least one loan or credit card, a credit information company report (CIC) said on Tuesday.
Credit institutions are rapidly approaching saturation levels in new customers as more than half borrowers are from a bank’s existing customer base, reports TransUnion aim said.
The total working population of India was estimated to be 400.7 million by January 2021, while retail credit market It has 200 million unique individuals who are credit active, it said.
It may be noted that for a long time, there have been concerns about borrowers ending up in the trap of usury moneylenders, who are not regulated and efforts have been made to deepen access to finance.
Over the past decade, the corporate lending side has faced a reversal, with banks preferring retail lending, but concerns are being expressed over the segment’s resilience following the pandemic.
The CIC data stated that there is a traceable market of 400 million people aged 18-33 in rural and semi-urban areas, and pointed out that the credit penetration in this segment is only 8 per cent.
In new to credit (NTCHigh priority for products including universe, personal loans and consumer durable loans are in areas below 30 years of age and those who live outside Tier-I cities, it said.
The composition of women, however, remains very low in the NTC segment, pointing out that the composition of women borrowers was only 15 per cent in auto loans, 31 per cent in home loans, 22 per cent in personal loans. and 25 percent in consumer durable loans.
The CIC data also shows that NTC consumers display high loyalty to the credit institution that provided them with their first credit opportunity, the report said.
It has been said that borrowers prefer payment over the first credit facility in times of financial stress.
Rajesh Kumar, Managing Director and Chief Executive, CIC said, “Identifying emerging NTC consumers across sectors and enabling them to access financial opportunities is critical for economic revival and sustainable financial inclusion in our country.”
He also said that lenders can conduct credit risk assessments for NTC customers as well as CIC’s product to improve turnaround times and reduce acquisition costs.
The ‘CreditVision NTC’ scoring model is based on an algorithm that uses information from applications and inquiries to help better assess the eligibility of the borrower.
Credit institutions are rapidly approaching saturation levels in new customers as more than half borrowers are from a bank’s existing customer base, reports TransUnion aim said.
The total working population of India was estimated to be 400.7 million by January 2021, while retail credit market It has 200 million unique individuals who are credit active, it said.
It may be noted that for a long time, there have been concerns about borrowers ending up in the trap of usury moneylenders, who are not regulated and efforts have been made to deepen access to finance.
Over the past decade, the corporate lending side has faced a reversal, with banks preferring retail lending, but concerns are being expressed over the segment’s resilience following the pandemic.
The CIC data stated that there is a traceable market of 400 million people aged 18-33 in rural and semi-urban areas, and pointed out that the credit penetration in this segment is only 8 per cent.
In new to credit (NTCHigh priority for products including universe, personal loans and consumer durable loans are in areas below 30 years of age and those who live outside Tier-I cities, it said.
The composition of women, however, remains very low in the NTC segment, pointing out that the composition of women borrowers was only 15 per cent in auto loans, 31 per cent in home loans, 22 per cent in personal loans. and 25 percent in consumer durable loans.
The CIC data also shows that NTC consumers display high loyalty to the credit institution that provided them with their first credit opportunity, the report said.
It has been said that borrowers prefer payment over the first credit facility in times of financial stress.
Rajesh Kumar, Managing Director and Chief Executive, CIC said, “Identifying emerging NTC consumers across sectors and enabling them to access financial opportunities is critical for economic revival and sustainable financial inclusion in our country.”
He also said that lenders can conduct credit risk assessments for NTC customers as well as CIC’s product to improve turnaround times and reduce acquisition costs.
The ‘CreditVision NTC’ scoring model is based on an algorithm that uses information from applications and inquiries to help better assess the eligibility of the borrower.
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