NBFCs - Small Ticket LAP: <10% Penetration Implies Huge Untapped Opportunity: ICICI Securities

ICICI Securities Report

Our recent interaction with financiers suggests most players are actively pursuing small ticket loan against property segment over medium ticket LAP.

As per CRISIL MI&A, the estimated market size for S-LAP stands at Rs 22 trillion, of which lenders have captured only Rs 1.8 trillion (ticket size of up to Rs 1.5 million) as on March 2023, implying less than 10% penetration.

Currently, S-LAP market is concentrated in five states namely Maharashtra (14% of total loans), Tamil Nadu (12%), Gujarat (10%), Karnataka (9%) and Rajasthan (8%), cumulatively accounting for 53% of total market.

Shriram Finance Company Ltd., AU Small Finance Bank Ltd. and Equitas Small Finance Bank Ltd. are the leading S-LAP players.

In this report, we have focused on less than Rs 1.5 million ticket size LAP market and analysed the data for leading 16 financiers having total outstanding assets under management of Rs 1.5 trillion as of March 2023.

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