Personal Loan Statistics in India
Not so long ago, personal loans were considered as the last solution to pressing money issues. But now, it is one of the fastest-growing forms of consumer lending in India, despite the COVID-19 impact. The weak economy due to the pandemic may have impacted the growth in credit of most segments, but comparatively, the impact is not much on personal loans. According to the Economic Survey 2019-20, the moderation in credit growth was seen across major credit segments, except personal loans. The personal loans sector continued to grow at a steady and robust pace.
Here’s a Roundup of Personal Loan Statistics
- According to the Reserve Bank of India (RBI), personal loans today account for 28% of total bank credit.
- The year 2019 showed growth in unsecured lending, which includes consumer durable loans and personal loans. This particular segment grew by over 100% in 2019 over 2018, with fintech lenders offering loans either through partnerships with existing NBFCs or banks or by acquiring an NBFC license.
- A report said that volumes of new personal loan accounts recorded a dramatic growth of 133.9% in Q3 2019 as consumer demand for the credit product continued to increase.
- Personal loans grew at 28% compared with 33.5% in the same period last year. The volume of origination in the personal loan category soared 134% YoY.
- There is a drop in average ticket sizes for personal loans offered by NBFCs. Last year, the average ticket size was about ₹95,000. This year it has gone down to about ₹35,000.
- According to the report published by an Indian digital company, 37% of millennial customers resorted to borrowing for emergencies like medical emergencies – a sharp increase from 31% last year.
- Personal loan balances grew 35.0% YoY in Q2 2019. Personal loan balances of NBFCs, PSU, and PVT increased by 51.4%, 31.5%, and 35.1% YoY in Q2 2019, respectively.
- Personal loan origination balances increased by 30.8% YoY in Q2 2019. This growth is seen across lender types with PSU, PVT and NBFC origination balances increasing YoY in Q2 2019 by 28.7%, 33.1%, and 33.7%, respectively.
- An increase in delinquency was seen for NBFC loans smaller than ₹ 50,000, which constitute almost 80% of NBFC personal loan originations.
- According to Transunion CIBIL, despite the demand for personal loans and credit cards, the lenders prefer to stay away from these segments due to asset quality concerns.
- A study indicated that the inability of some consumers to repay their after the end of their moratorium period is likely to increase the probability of default and negatively impact their credit scores.