Retail credit growth in India slowed during the June 2024 quarter, with mortgage lending bearing the brunt, according to TransUnion’s latest CIBIL Credit Market Indicator (CMI) report. Mortgage loan originations fell 9% in volume, contributing to an overall decline in the CMI supply index.
Financial institutions have restricted their credit offerings, particularly for consumer-oriented products, following regulatory guidelines. Rajesh Kumar, MD & CEO, TransUnion CIBIL, highlighted the impact of high credit-deposit ratios on this slowdown, and urged lenders to focus on underserved consumer segments to ensure sustainable growth in retail credit.
Mortgage loans showed a further contraction, with growth plummeting from -4% in June 2023 to -9% in June 2024. Loans against property (LAP) followed suit, with growth declining sharply from 13% to 2%. Auto and two-wheeler loans also slowed, with growth falling from 10% and 17% respectively in June 2023 to 2% and 13% in 2024.
Personal loans suffered the most dramatic decline, with growth falling from 36% to just 3%, while credit card transactions suffered a sharp contraction of 30% year-on-year. Consumer durable loans also slowed, with growth falling from 14% in 2023 to 4% in 2024.
Despite the slowdown in credit supply, the report showed improvements in credit performance, with delinquency rates on housing, auto and two-wheeler loans declining. Credit cards were an exception, however, with delinquencies up 17 basis points, possibly driven by inflation and higher interest rates.
The report also found that only 12% of loans issued were to consumers new to credit, marking a historic low and potentially limiting future consumer spending and financial inclusion efforts.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.