A total of 34 lakh home loans worth Rs 9 lakh crore were disbursed during the year ending December 2022, of which the ticket size category of less than Rs 25 lakh had the maximum number of disbursements, finds a study on retail lending by Equifax and Andromeda. walked.
Banks, housing finance companies and other institutions provide home loans worth Rs 9 lakh crore during the period January 2022 and December 2022, registering an annual growth of 18%. The number of loans disbursed during the calendar year 2022 also increased by 17%.
total outstanding portfolio home loan increase 16% from December 2021 to December 2022, said the study titled ‘Indian Retail Lending Overview – April 2023’.
It further disclosed that the personal loan segment registered a growth of 57% during 2022. Market size of retail industry to reach Rs 100 lakh crore by December 2022.
Across various loan segments, the study said the retail industry reported 54 crore active loans as on December 31, 2022.
Further, it said that there were 6.5 crore active consumer durable loans as on December 31, 2022, registering an annual growth of 48% over the previous year.
“Be it public sector banks, private sector banks or housing finance companies (HFCs), all are witnessing good growth in the home loan business,” said V Swaminathan, executive chairman, Andromeda Sales & Distribution.
Largest share in 0-25 lakh ticket size range
While the 0-25 lakh ticket size category accounted for 67% of loan disbursements, there was a 36% increase in disbursements in the Rs 75 lakh to Rs 1 crore ticket size category in January-December 2022 as compared to the previous year. In 2021, the growth in the Rs 0-25 lakh category was also 67% over the year 2020.
Study shows that out of total outstanding portfolio of home loans grew by 16% from December 2021 to December 2022, private sector banks saw a growth of 20% from December 2021 to December 2022 – Rs 5 lakh crore outstanding at the end Portfolio of December 2022.
Noting that retail lending was badly hit during the pandemic, the report said, “It has bounced back by registering a 40% annual growth from January 2022 to December 2021.” 31 crore loans have been disbursed till Dec. 2022.”
The report states that personal loans saw a growth of 32% from December 2020 to December 2021 and 57% from December 2021 to December 2022.
Swaminathan said, “The growth in demand for personal loans in India can be attributed to a number of factors such as rising consumption-driven demand, ease of access to credit and competitive landscape among lenders. The recent increase in the RBI’s policy rate Despite the increase, personal loan interest rates have not seen a similar increase as compared to home loan rates.”
However, he underlined that borrowers should be careful while availing personal loans, keeping in mind their repayment capacity and avoid the pitfalls of the debt trap.
KM Nanaiah, MD, Equifax Credit Information Services and Country Leader – India and Ministry of External Affairs, Equifax, said, “The insights presented in our report will prove extremely beneficial to lenders as they aim to maintain high underwriting standards, manage risks prudently, To manage and increase operational efficiencies. In addition, the report will enable lenders to effectively navigate the new high-growth environment by leveraging the knowledge gained from the pandemic.”
Public sector banks and private sector banks contributed the most to retail loan disbursements. However, non-banking financial companies (NBFCs) saw a growth of 78% during January 2021 to December 2021 as compared to January 2020 to December 2020. Private sector banks registered a growth of 24% on an annual basis.
“NBFCs play a major role in the financial system of a country dominated by public and private sector banks. NBFCs are helping access much-needed credit to every part of the country,” Swaminathan said.
Apart from large number of branches, NBFCs are using digital infrastructure and app based technology for loan disbursement.