Small towns account for big share of consumer loans

Mumbai: Demand for consumer loans is no longer limited the preserve of large cities. In the last festival quarter (October to December 2023), Kanpur and Bara Banki in Uttar Pradesh were among the top ten cities in terms of consumer loan growth, replacing Jaipur and Surat.

According to an analysis by credit bureau CRIF High Mark, cities outside the top 100 had the largest share of auto loans, two-wheeler loans, and consumer loans disbursed in Q3FY24.

The study grouped the cities into four categories: top 8 cities, top 9-50 cities, top 51-100 cities, and cities beyond the top 100. Meanwhile, the share of the top 10 cities has dropped from 42% in Q3FY23 to 38.3% in Q3FY24 in consumer loans.

Sanjeet Dawar, MD of CRIF High Mark says, "What is interesting to note is that credit demand during this period is not just limited to larger geographies. Loans such as two-wheeler and consumer durable loans have seen an increasing share of loans come from cities beyond the top 100, from Q3 FY23 to Q3 FY24."

The top five states for consumer loan originations are Maharashtra, Karnataka, Uttar Pradesh, Tamil Nadu, and Telangana. Uttar Pradesh has moved up one place from last year to displace Tamil Nadu and become the third-largest state for consumer loans.

During the festive season, growth has accelerated in consumer durable loans which have grown 27% compared to 13% last year. Growth has also almost doubled in the case of home loans to 8.9% in Q3FY24 from 4.9% in Q3FY23. Among the loans to individuals disbursed during the quarter, home loans were the highest during the quarter at Rs 247000 crore followed by personal loans at Rs 232200 crore.

Source : The Times of India, 23rd April Mumbai