CRIF High Mark, one of the leading credit bureaus in India has released the CRIF CreditScape : Personal Loans. It provides razor sharp insights on the personal loans space and notable trends across geographies and yearly data points on the same until August 2019.
Below is the quote from Navin Chandani, MD & CEO, CRIF High Mark summarising the CreditScape:
“Personal Loan business has witnessed sourcing disruption over the last 3 years, with Short Ticket Personal Loan (STPL, sub 50K) being the key driver. NBFCs and new age Fintechs are leveraging this to drive customer acquisition while also serving short term credit needs of the borrowers.”
Key highlights for your quick reference:
· As of Aug 2020, the personal loans book stood at ₹5,07,684 crore, having grown by only 0.57% over Mar 2020 due to COVID-19 disruptions. In the last 2 years, the PL book has grown by around 40% annually, which dropped to a sluggish annual growth of only 26.4% as of Mar 2020.
· In terms of volume, NBFCs continue to grow and have doubled their market share in the last 2 years, observed at FY 2020 end. Their current market share as of Aug 2020 is 42%. Public sector banks and Private banks have lost significant volume share over the last 2 years.
· Annual originations by volume in FY 2019-20, increased Y-o-Y by 140% and by value at 47%. Annual originations (by volume) of <50K and 50K-1L in FY 2019-20 have seen an annual growth of 185% and 56% respectively.
· As of Aug 2020, the PL book in Metro cities has faced greater impact due to COVID-19 pandemic, owing to stricter lockdown rules and near nil economic activity through most of the 5 month period in FY 2020-21. Originations in Metros have witnessed 42% degrowth compared to the same period previous year, as against 27% in Tier III & beyond areas.
· Overall Amount (value) delinquency 91-180 DPD continues to remain low at 0.61%, sub 50K ticket size segment worst performing at 9.4%. The collections were impacted due to the lockdown, visible in the forward flow rates observed for loans given by NBFCs of ticket size <50K, with net forward flows in Metros as high as 32.2% in May 2020 from 13.4% in Feb 2020, also visible in Tier II and III regions. The impact was equally severe for 50K-1L sized loans.