Personal loan origination volumes rose 22.3% year-on-year (y-o-y) during the festive season in October-December despite the Reserve Bank of India (RBI) raising the risk weight on unsecured consumer credit, a report from CRIF High Mark showed on Thursday.
Loan origination value rose 13% y-o-y to Rs 2.3 trillion as on December 31. The report showed that there is a shifting borrower preferences towards smaller-ticket loans during the festive season with average ticket sizes falling 8% y-o-y to Rs 68,400 in the December quarter.
Public sector banks continue to dominate originations value with a market share of 37.4%. Non-banking financial companies (NBFCs) hold a nearly 71% market share in terms of volume.
The origination value of auto loans rose 9% to Rs 88,600 crore as on December 31. The average ticket size of auto loans rose to Rs 8.1 lakh in the December quarter from Rs 7.3 lakh a year ago.
Two-wheeler loan originations typically surge during the festive season every year fuelled by dealer discounts and low interest rates offered during this period. Origination value rose 21% y-o-y to Rs 30,400 crore as on December 31.
The origination value of two-wheeler loans rose 25% in rural areas, 21% in semi-urban areas and 14% in urban geographies. The average ticket size rose 7.2% y-o-y to Rs 89,000 in the December quarter.
Origination value in consumer durable loans rose 27.1% y-o-y to Rs 39,900 crore.
Higher origination in consumer durable loans during October-December was witnessed as customers tend to align their purchases of electronic goods and home appliances with the festive season owing to big discounts and lucrative deals, CRIF High Mark showed.
Home loan origination value rose nearly 9% y-o-y to Rs 2.5 trillion as on December 31.
The report highlights that the top 10 states contributed to 72% of overall originations (value) in the December quarter. Maharashtra saw the highest originations for auto loans, personal loans, consumer durable loans, and home loans, Uttar Pradesh was at the top for two-wheeler loans.
“The festive season remains a crucial driver for consumption-based lending in India, benefiting both lenders and borrowers,” Sanjeet Dawar, managing director, CRIF High Mark, said.
He added that the festive quarter has seen sustained growth in originations across key consumer lending segments like auto loans, two-wheeler loans, personal loans, consumer durable loans and home loans.
