Loan Requests Reached Record Level During FY 23 Festive Season: Report

CRIF High Mark, an Indian credit information company, reports substantial growth in loan originations across various categories, including Auto, Two-Wheeler, and Personal Loans in Q3 FY23 (festive season)

CRIF High Mark, a credit information company based in India, reported that loan originations in the FY23 Q3 increased by 20 per cent over the FY22 Q3.

Its reports ‘How India Celebrates’ have revealed a consistent growth pattern historically, during the festive quarter, spanning October to December in earlier years.

Key Takeaways
Non-Banking Financial Companies (NBFCs) are gaining ground in loan originations, both in value and volume, indicating a shift in consumer preferences towards these alternative lenders. Origination generally includes all the steps from a loan application to the disbursal of funds (or declining the application).

Maharashtra emerges as the top state for loan originations in all categories, except for two-wheeler loans, where Uttar Pradesh takes the lead. Delhi leads the top cities for most loan categories except Mumbai, which tops the home loan category.

Notable Growth in Auto, Two-Wheeler, Personal Loans
The festive season has been a catalyst for growth in originations for auto, two-wheeler, and personal loans. Comparing Q3 FY23 with Q3 FY22, auto loans witnessed a remarkable 24 per cent increase in originations (value), reaching Rs. 75,500 crore.
Similarly, Two-Wheeler Loans experienced a significant 34.5 per cent growth, with originations rising from Rs. 17,100 crore to Rs. 23,000 crore during the festive season. The Personal Loan segment also displayed robust growth, with a 20.2 per cent increase, totalling Rs. 1,90,500 crore. It saw a 24 per cent rise in terms of volume.
Consumer Durable Loans observed a 12 per cent growth in originations (volume), indicating heightened consumer spending during this period. Home Loans also displayed a 5.5 per cent growth in loans exceeding Rs. 35 lakh.

Says Sanjeet Dawar, Managing Director, CRIF High Mark, said, “Consumers are confidently borrowing more with every festive season. Relative to Q3 FY22, over 20 per cent growth was observed in these products in Q3 FY23. Historically, the festive season has witnessed numerous attractive offers from lenders across sectors to drive purchases, with credit being a major enabler for customers to make the most of these offers.”

Source: Publication: Outlookindia ,15th June,2023