Consumer credit: ‘Almost half of the first-time borrowers below 30; small ticket loan demand jumps’

Significant diversity in Consumer Credit behaviour and profile

According to the TransUnion Cibil google report, significant diversity in borrower profiles, 49 per cent of first-time borrowers was less than 30 years old, 71 per cent were based in non-metro locations and 24 per cent were women in 2020.

“phone on loan”, “laptop on EMI” and “Mahila loan 30000”  are searched under small-ticket loans less than Rs.25,000. Loan disbursals among all personal loans have gone up from 10 per cent in 2017 to 60 per cent in 2020, the report said. The disbursal speed and convenience being the hallmarks of these loans, the digital-first sellers have the largest share in this category with 97 per cent of all personal loans disbursed by them being under Rs 25,000 according to TransUnion CIBIL google report. Consumer credit: ‘Almost half of the first-time borrowers below 30; small ticket loan demand jumps’

The report said there is a perceptible acceleration in Consumer credit demand in the form of credit cards, etc, from non-metro locations, with 77 per cent of all retail loan enquiries on the TransUnion Cibil bureau originating from tier 2 cities and beyond in CY 2020. The loan-related searches from tier 2 and tier 3 locations grew by 32 per cent and 47 per cent respectively in 2020 over those for 2017.  Loan-related searches from tier 2 and tier 3 locations grew by 32 per cent and 47 per cent respectively in 2020 over those for 2017. Interestingly, ticket sizes on loan products like personal loans, auto loans and consumer durable loans are geo-agnostic,” it said.

The report showcases a significant diversification of demand for consumer credit, with 49 per cent of new-to-credit retail borrowers being less than 30 years old, 71 per cent of them being located in non-tier 1 cities, and increasingly, more women availing Consumer credit opportunities.

In 2020, 38 per cent of loans disbursed to the ‘prime’ credit tier was through FinTech NBFCs (non-banking financial companies). According to the report, there was a 2.5 times surge in online searches for loans from non-tier 1 cities between 2017-2020, with 77 per cent of all retail loan enquiries in 2020 coming from tier 2 cities and beyond. Also according to the report with reference to product type growth in searches for car loans between the two halves of 2020 grew the fastest at 55 per cent, with home loans following at 22 per cent growth,” it said.

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