Retail loan demand sees faster growth in B-towns

faster growth in Retail loan demand

Consumer Loan is growing at a very high rate. People these days are preferring consumer loans. Growth in consumer loans is moving from metros and large cities to non-urban areas with over 70% disbursals taking place outside tier-1 cities. The searches outside cities are growing 2.5 times faster as compared to cities for the loan as shown by the online trend.

Retail loan demand sees faster growth in B-towns

Searches for Retail loan grew the most in tier-3 cities at 47%, followed by tier-2 (32%) and tier-4 (28%) According to the study by Google and TransUnion Cibil.  The retail credit industry of India stood at $613 billion (Rs 44 lakh crore), which reflects an 18% compounded annual growth rate (CAGR) since 2017. Also, the home loans at $290 billion (Rs 21 lakh crore) form the largest chunk, loan against property and business loans are growing at a fast rate.

small loans which are driving up volumes with the help of digital lending. Retail loan of below Rs 25,000 have grown 23 times since 2017.  38% of loans disbursed to the ‘prime’ credit tier was through fintech NBFCs (non-banking financial companies) according to the reports of TU cibil in 2020. “Consumer credit demand and access have undergone a paradigm shift over the last few years, with the post-pandemic circumstances having further accelerated this change.” said TU Cibil MD & CEO Rajesh Kumar.


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