CIBIL Data – Retail Stress Increases in India

India’s Leading Credit Bureau – CIBIL data reveals that delinquencies across product levels in the retail segment have shown a modest increase but the situation is not alarming. The main segment which is under stress is auto loans, which is driven by CVs as evidenced in the latest results of banks.

Credit Card Segment – While the overall credit card balances grew by ~41% YoY to ~Rs1.1tn,
balances in the semi-urban and rural areas grew at a faster pace (+52% YoY) indicating increasing usage of cards as a payment option in these areas.

In the Personal Loan segment, the origination volumes more than doubled to 7.3m accounts out of which ~68% were originated by NBFCs. 78% of the accounts originated by NBFCs were in the micro loan category (loan size of up to Rs25K).

While the overall Home Loans outstanding grew by 10% YoY, Housing Finance Companies growth slowed considerably to 8% vs ~23% in 3QCY18 largely on account of funding crunch faced by these HFCs. Private banks have been aggressive to capture the space vacated by HFCs and consequently balances originated by private banks in the affordable segment grew by 14% YoY in 3QCY19. This could partially be driven by portfolio buyouts as well.

Within the auto segment, the origination volumes and balances declined marginally across lenders as both banks and NBFCs are seeing higher delinquencies in the CV segment largely on account of lower freight rates and improvement in efficiency post implementation of GST. NBFCs 30+ / 90+ delinquency rates have increased in this segment sharply.

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