A recently report by CIBIL provides keen insights into the current state of the consumer loan growth business. Given their access to all market participants (banks and NBFCs). We see this product as well as their ‘MSME pulse’ as
one of the most important reports to understand these businesses.
Key takeaways from the recently published CIBIL report on consumer lending:
(1) Retail loans grew 27% yoy led by 26% growth in live accounts touching 100 million accounts. The flattish average ticket size is attributed to a change in the loan mix towards short duration consumer loans like credit cards, personal loans and consumer durable loans. (2) Average retail lending balances are Rs 0.6 mn. (3) Maharashtra, Tamil Nadu and Karnataka account for 40% of outstanding loans.
State of Personal Cash Loans in India
Overall loans grew ~45% yoy led by 28% yoy volume growth and 112% yoy growth in average ticket size ( Rs 0.2 mn). Loan originations grew >45% yoy with an average ticket size at the time of origination at Rs 0.3 mn. CIBIL report indicates a fair amount of repeat transactions as well as consumer loyalty exhibited in the product.
Total Outstanding Personal Loans by Indians is Rs 2,954 Bn
Average Balance Per Consumer Account in Personal Loan Category is Rs 249,000
Credit Card Lending Size Skewed towards Volume
Overall receivables grew ~42% yoy, led by 23% yoy volume growth and 15% yoy growth in average balances. Growth is focused primarily on prime and near prime CIBIL Scores ranging between 650 and 750. Zero balance cards ratio is stable at ~25% of cards with ~55% coming from consumers having a single card.
Total Outstanding on Credit Cards by Indians is Rs 796 Bn
Average Balance Per Consumer Account in Credit Card Category is Rs 49,000
Our talks with industry participants and Small Finance banks indicate 40-50% of customers have new credit relationships (i.e., they have no Credit Information Bureau of India Limited (CIBIL) records before taking a loan), which shows the deepening penetration of organised finance.