Consumer Lending DataPoints – CIBIL Analysis

TransUnion CIBIL, a leading credit information bureau, shared some insights on behavioural trends in consumer / business lending in India. TransUnion CIBIL now has records of 400mn customers, of which 185mn customers have access to live retail lending facility. Within this, 85mn customers fall in consumer lending segment and ~100mn in business lending and others (agri, PSL etc). The company adds 15mn -20mn through new to credit route, 15% of overall.

There is improving penetration (breadth rather than depth) is reflected in unique customer enquiry growth accelerating from 27% in Q2CY18 to 43% in Q4CY18. Encouragingly, single product single account customers constitute 40–45% (in terms of volumes) for Credit Cards, Personal Loans & Consumer Durable Loans. No doubt, the cross-selling trend is on the rise—multi product multi accounts (MPMA) up from 32% in FY16 to 37% in FY18. That said, asset Read the rest of this entry »

How BankBazaar and Wishfin are Transforming Lending / Financial Savings / Insurance for Gen Next?

Smartphone penetration, availability of cheaper 3G/4G Data Plans along with idiosyncratic events like demonetization offered have transformed how gen next India financially transacts leading to higher traction on Platforms such as BankBazaar and Wishfin. They are an intermediary between the end consumer (who wishes to purchase a product, physical or financial) and financiers (banks, insurance, AMCs).

Digital platform penetration for sourcing loans and cards is expected to grow in the next 10 years to 60% from 15%. The number of visits to bankbazaar.com grew from 3 mn visits a month to 40 mn visits in a span of three years so is the exponential rise in traffic to Wishfin. Both have a strong online market presence and work with all the leading financial institutions in India.

The typical customer that visits Read the rest of this entry »

Rise & Future of ATM for Cash Transactions in Digital India

India has seen explosive growth across all digital channels i.e. POS, credit cards, debit cards and wallet payments. However, currency in circulation (CIC) has grown from Rs17 tn in 1HFY17 (pre demonetization) to Rs21 tn as of FY2019, thus signifying that despite increasing digitization of transaction, cash remains core for the Indian economy, large amounts of cash is used for Corruption by Politicians and Government Officials.

The ATM Demand – The quantum of ATM transactions have increased substantially over the past few years, especially in semi-urban areas. This is driven by government initiatives like PMJDY and DBT scheme etc. These demand levers Read the rest of this entry »

How Credit / Debit Cards evolved to the Forefront of Payment System in India ?

Major players entered the Indian Plastic Money – Credit / Debit Card race only in 2002-03, even though the industry began as early as 1992. The first leg of growth took place during 2003-08. The introduction of lifetime free cards, coupled with an absence of credit bureaus, had dire consequences that played out during the global financial crisis. The industry has evolved today and the learnings of the past have paved the way for the next leg of growth, which is taking place right now.

Credit Card penetration in India is still extremely low at ~4-5% and one expects a few more years of strong growth in card additions. Credit Cards have growth ~3X in the past three years to ~46 mn while debit cards have grown even more rapidly at a ~48% CAGR to ~900 mn, the latter Read the rest of this entry »

Micro Payments and Small Merchants – Next Big Story

The Payment ecosystem in India comprised of (1) RTGS for high value payments – Corporate and Government, (2) NEFT/NACH for low value payments, that mainly supported Salary and SME Business. In recent years, the micro-value payments segment has seen the introduction of a number of products like digital wallets, UPI etc. This has driven the lower end of the pyramid to the payments ecosystem, fulfilling the
government’s financial inclusion objective.

Growth of UPI – The value of transactions through UPI surpassed that of cards last year at ~Rs120 tn. This was in part driven by incentivization in the form of cashbacks etc. and hence is expected to moderate slightly from these levels as Read the rest of this entry »

Axis Bank Renewed Push on Payments / Credit Cards Business

Axis Bank has been undergoing a structural shift for sometime. It got a shot in the arm with HDFC Group veteran Amitabh Choudhary joining as the CEO of the Bank. Within retail, there has been a gradual increase in the share of high yielding retail products like credit cards and personal loans.

Payments business plays four important roles in a bank’s strategy (1) acts as the face of the franchise, (2) increases customer engagement, (3) drives profitability and (4) drives partnerships. Retail electronic payments in India are growing at a tremendous pace which Read the rest of this entry »