CRIF High Mark, a leading Indian credit bureau, launched the fourth edition of its flagship report, How India Lends, today. The report deep dives into Consumption Lending, MSME Lending, and Microfinance Lending for the last five years (FY20 to FY24) with an emphasis on key insights into the industry and consumer trends.
Consumption Lending includes Home Loans, Personal Loans, Two-Wheeler Loans, Auto Loans, Consumer Durable Loans and Credit Cards. MSME lending includes Entity and Individual loans. Entity MSME Loans are defined based on entity-level credit exposure of up to ₹50 Crore.
Individual MSME Loans include Business Loans, Property Loans, Commercial Vehicle Loans and Construction Equipment Loans. Corporate Loans refer to loans given to Mid and Large-size entities with credit exposure of more than ₹50 Crore and are reported to the Commercial Bureau.
Insights into Trends and Patterns Shaping Major Lending Product Categories in India
Consumption Loans: Portfolio outstanding of Consumption Loans increased by 15.2% YoY to ₹90.3 Lakh Cr as of Mar’24, however, portfolio growth has decelerated (from 17.4% as of Mar’23) primarily driven by the slowdown in the Home Loans segment (40.1% of consumption loans portfolio by value)
• Home Loans:
– Portfolio growth slowed down to 7.9% YoY (vs. 23% YoY as of Mar’23) due to muted growth in originations (9.2% in FY24 vs 18.2% in FY23)
– Shift in Originations (by value and volume) from ticket size ₹ 5L – ₹ 35L to ₹ 35L +
– Growth of 32% in Average Ticket Size (ATS) from ₹20.1L in FY20 to ₹26.5L in FY24
• Personal Loans:
– Robust Portfolio growth (26% YoY as of Mar’24) despite recent regulatory reforms
– ₹10L+ Ticket Size loans continue to increase their share in originations by value, while <₹1L Ticket Size loans continue to dominate by volume
– Banks dominate Originations (by value) and NBFCs dominate Originations (by volume)
• Two-wheeler loans:
– Growth accelerated to 34% YoY (from 30% as of Mar’23) primarily driven by the shift in originations to Higher Ticket Size loans, despite lower origination volume growth YoY (13% in FY24 vs. 32% in FY23)
– Shift in Originations (by value and volume) with a 4.6x growth can be seen for ₹75K+ from FY20 to FY24
• Auto Loans:
– Marginal slowdown in Portfolio growth to +20% YoY (vs. 22% as of Mar’23) buoyed by Shift in Originations to ₹10L+ Ticket Size loans but dampened by lower growth in overall origination volumes
– 5% growth in Originations Volume (vs. 21% in FY23) and 12.5% growth in Originations Value (vs. 37.3% in FY23)
• Consumer Durable Loans:
– Robust portfolio growth of 34% YoY (vs. 26% YoY as of Mar’23) driven by the shift in originations to ₹25K+ ticket size loans, which offset the muted growth in originations volumes (8.5% in FY24 vs 38.2% in FY23)
– 21% growth in Originations by value, and 8.5% growth by volume in FY24
– Private banks gained origination share from FY20 to FY23, however NBFCs regained some of their lost share in FY24
• Credit Cards:
– 16.5% growth in Active cards from Mar’23 to Mar’24
– Credit card balances reached ₹3.0 lakh crore, with 999.1 lakh cards in circulation as of Mar’24
MSME Lending: Individual MSME segment growth outpaces that of Entity MSMEs, both in terms of portfolio growth (28.9% YoY vs 6.6% YoY) and originations growth (12.6% YoY vs 3.1%).
Individual MSME Loans
• Portfolio outstanding of Individual MSME Loans stands at ₹35.7 Lakh Cr as of Mar’24 with growth accelerating to 29% YoY (vs. 15% YoY as of Mar’23)
• Witnessed Y-o-Y growth in Originations by value at 12.6% and by volume at 19.4% in FY24
• Individual MSMEs witnessed improvement in delinquency across all Ticket sizes and Lender types
Entity MSME Loans
• The Portfolio outstanding of Entity MSME Loans stands at ₹28.4 Lakh Cr as of Mar’24 with growth decelerating to 6.6% YoY (vs. 17.2% as of Mar’23)
• The sector witnessed Y-o-Y growth in Originations by volume at 18.9%, while 3.1% by value, with the Micro Segment being the largest contributor
Microfinance Lending:
• Portfolio growth accelerated to 27% YoY (vs. 21% YoY as of Mar’23) with the Microfinance Loans portfolio outstanding of ₹442.7 K Cr as of Mar’24.
• The average ticket size for MFIs increased by 11% from ₹40.9K to ₹45.4K between FY23 and FY24
• PAR 31-90% and PAR 91-180% were stable as of Mar’24 compared to Mar’23
Commenting on the report Mr. Sanjeet Dawar, Managing Director, CRIF High Mark, said, “The fourth edition of the report ‘How India Lends – FY2024’ provides a comprehensive overview of the evolving lending landscape in India. This year’s report highlights the continued dominance of Home Loans and the notable growth in Personal Loans and Two-Wheeler Loans.
We also observe a significant rebound in NBFCs’ market share and a marked expansion in the Microfinance sector. The stability in delinquencies and the strong performance across various lending categories underscore the ongoing resilience and vitality of the Indian credit market.”
