India's Consumption Loan Portfolio Grows 15.2% YoY To Rs 90.3 Lakh Crore

India's consumption loan portfolio grew by 15.2% year-on-year to Rs 90.3 lakh crore as of March 2024, according to the latest credit bureau report. The fourth edition of CRIF High Mark report noted a slowdown from the 17.4% growth recorded in March 2023, largely due to a deceleration in the home loans segment, which accounts for 40.1% of the overall consumption loan portfolio by value.

The home loans portfolio saw growth slowing down to 7.9% YoY in FY24, from the 23% expansion seen in fiscal 2023. This was mainly due to muted growth in 'originations', which increased by 9.2% in fiscal 2024 compared to 18.2% in the previous fiscal year.

Origination refers to the process by which a lender creates or initiates a new loan or credit, including evaluating, processing, and approving a borrower's application.

The report finds a shift toward higher ticket sizes, with a growing preference for loans above Rs 35 lakh, although the average ticket size rose by 32% from Rs 20.1 lakh in fiscal 2020 to Rs 26.5 lakh in fiscal 2024.

In contrast, the personal loans segment maintained strong momentum, growing by 26% YoY in FY24 despite recent regulatory reforms. Larger ticket loans of Rs 10 lakh and above increased their share in originations by value, while loans under Rs 1 lakh continued to dominate in volume.

Banks led in value-based originations, whereas non-banking financial companies remained dominant in volume.

Two-wheeler loans experienced a 34% YoY growth in fiscal 2024, up from 30% in fiscal 2023, fueled by a shift to higher ticket-size loans. However, the overall volume of originations grew at a slower pace of 13% in fiscal 2024 compared to 32% in fiscal 2023.

Auto loans, on the other hand, grew by 20% YoY in FY24, compared to 22% in FY23.

Consumer durable loans posted a robust growth of 34% YoY in FY24, up from 26% expansion in the previous fiscal. This growth was driven by a shift to larger ticket sizes, although origination volumes grew by only 8.5% in fiscal 2024, compared to 38.2% in fiscal 2023.

The MSME lending segment displayed mixed results, with individual MSME loans growing faster than entity MSMEs. The individual MSME portfolio increased by 29% YoY in fiscal 2024, accelerating from 15% in fiscal 2023, while entity MSME loans grew by just 6.6% YoY, a sharp slowdown from 17.2% in the previous year.

Microfinance lending also saw strong growth, with the portfolio rising by 27% YoY in FY24, compared to 21% in fiscal 2023.

"The resilience of the Indian credit market is evident in the strong performance across various lending categories and the stability in delinquencies. Home loans remain dominant, but the growth in personal loans, two-wheeler loans, and the rebound of NBFCs highlight significant shifts in the lending landscape," CRIF High Mark MD Sanjeet Dawar said.