Home / Industry / Banking /  Youngsters are boosting India's loan growth, says report

Youngsters have become the driving force behind India's credit growth which is witnessing the expansion of riskier segments like credit cards, consumer durable loans and personal loans, said TransUnion Cibil's data. 

The credit information company's data for the September quarter revealed that the proportion of loan inquiries by people of age group 18-30 years grew by 5% from last one year to 43 per cent in the quarter. 

TransUnion Cibil said that the trend of rising credit growth is underlined by rapid boost in consumption-led credit products like credit cards, consumer durable loans,etc.

"This trend is underlined by rapid growth in consumption-led credit products like credit cards, consumer durable loans and personal loans," the credit information company said.

Personal loans and credit cards are unsecured loans with higher non-payment rates. Whereas consumer durable loans are for depreciating assets. Banks approve such loans on the basis of the credit history of the person and his credit performance history.

According to the report, the 90-day overdue rate in credit cards was 2.23 per cent, consumer 1.91 per cent for consumer durable loans and 1.02 per cent for personal loans. The least stress loan category is auto loan segment with 0.95 per cent rate. The overdue rate was highest at 2.78 per cent for loans against property. Such loans are generally tajen by small business persons.

Better credit access leads to improvement in quality of life of youngsters

The report stated that the an increased access to credit opportunities of youths helped them in improving their quality of life and financial stature.

"Increased access to credit opportunities for younger borrowers has direct correlation to improvement in the quality of life and financial empowerment of India's youth, who are the drivers of the country's economic engine," the company's managing director and chief executive Rajesh Kumar said.

Consumer durable loans showed a pent up demand from outstanding balances perspective. The consumer durable loans increased by 67 per cent. On the other hand credit cards increased by 28 per cent and personal loans were up by 32 per cent.

Indicating improvement in retail lending health, the report said the Credit Market Indicator(CMI) reached 100 level in September last year. According to the rport, the health improved across all the major states.

(With agency inputs)


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