CRIF High Mark’s How India Celebrates report observes good growth in originations (value) for Auto, Two-Wheeler, and Personal Loans in the festive season from Q3 FY22 to Q3 FY23
The report analyses key trends across major consumer lending products during the festive season i.e., Q3 every year from FY21 – FY23 and Q3 compared to the rest of the year
CRIF High Mark, a leading Indian credit bureau, today, launched the second edition of its How India Celebrates Report on Festive Lending in India. The FY23 report deep dives into the overall trends and presents insights into the consumer loan categories like auto, two-wheeler, personal, consumer durable, and home loans during the festive quarter i.e., third quarter of the financial year (Oct-Nov-Dec). The report captures originations by value and volume across each product, lender type, and geography along with early delinquency trends.
The growth trajectory of Auto, Two-Wheeler, and Personal Loans from Q3FY21 to Q3FY23
In terms of value and volume, the festive season (Q3) has proved to be the best quarter for Auto and Two-Wheeler Loans originations over the past few years. During this period, originations (value) increased by 24%, from Rs.60.9 K crore in Q3 FY22 to Rs.75.5 K crore in Q3 FY23 for Auto Loans. In the Two-Wheeler loan category, 34.5% growth was observed in originations (value) during the festive season from Rs.17.1 K crore in Q3 FY22 to Rs.23K crore in Q3 FY23. The report also notes that there was a growth of 20.2% in originations (value) during the festive season from Rs.158.5 K crore in Q3 FY22 to Rs.190.5 K crore in Q3 FY23 in the personal loan segment.
Key trends of major retail loan products:
Below are the key trends observed during the festive season (Q3 FY21, Q3 FY 22, Q3 FY23) across major consumer lending products – Auto Loans, Two-Wheeler Loans, Personal Loans, Consumer Durable Loans, and Home Loans –
- Auto Loans witnessed 24% growth in originations (value) during the festive season from Rs. 60.9 K crore in Q3 FY22 to Rs.75.5 K crore in Q3 FY23. There was a 5% growth in originations (volume) during the festive season from Q3 FY22 to Q3 FY23, while 18.5% growth in average ticket size from ₹6.5L in Q3 FY22 to ₹7.7L in Q3 FY23. Originations (value) were dominated by Public Sector banks and by NBFCs by volume in Q3 FY23.
- Two – Wheeler Loans witnessed 34.5% growth in originations (value) during festive season from ₹17.1 K crore in Q3 FY22 to ₹23 K crore in Q3 FY23. There was a 20% growth in originations (volume) during the festive season from Q3 FY22 to Q3 FY23, while a 12% growth in average ticket size from ₹75K in Q3 FY22 to ₹84K in Q3 FY23. The report also notes that NBFCs other than captive financiers and Private banks gained originations share (value and volume) during the festive period. NBFCs other than captive financiers dominated originations (value and volume) during festive seasons Q3 FY21, Q3 FY22, and Q3 FY23. Rural, semi-urban, and urban regions contributed equally to the growth of Two-Wheeler Loans from Q3 FY22 to Q3 FY23.
- Personal Loans witnessed 20.2% growth in originations (value) and 24% growth in originations (volume) during the festive season from Q3 FY22 to Q3 FY23. Personal Loans of <50K ticket size witnessed 10.1% growth in originations (value) while there was 21.1% growth in originations (value) for Personal Loans>₹50K during the festive season from Q3 FY22 to Q3 FY23. By volume, there was 24.7% growth in originations for Personal Loans <₹50K and 22.8% growth for Personal Loans> ₹50K during the same period. New to Bank borrowers constituted 33% of originations (value) during the festive seasons Q3 FY22 and Q3 FY23. NBFC - Fintechs, Private Banks, and NBFCs other than Fintechs gained a share in originations (value) in the festive season from Q3 FY22 to Q3 FY23.
- Consumer Durable Loans witnessed 12% growth in originations (volume) during the festive season from Q3 FY22 to Q3 FY23. Festive quarter Q3 has been a good quarter in comparison to the rest of the year for CD originations in the last few years. Private banks have continued to gain share in originations (value and volume) during festive seasons Q3 FY21, Q3 FY22, and Q3 FY23.
- Home Loans saw a 5.5% growth in >₹35L loans during the festive season from Q3 FY22 to Q3 FY23. In this category, Public Sector Banks dominated originations (value and volume) during festive seasons Q3 FY21, Q3 FY22, and Q3 FY23. Public Sector Banks and HFCs gained a share in originations (value) during the festive season from Q3 FY22 to Q3 FY23.
Geographic Deep Dive
Maharashtra dominates originations (value) in all categories except Two-Wheeler loans
The report observes that the top 10 states contributed to 73% of overall originations (value) in Q3 FY23 for these five major consumer lending products. Among these top 10 states, originations (value) were highest in Maharashtra for Auto Loans, Personal Loans, Consumer Durable Loans, and Home Loans and in Uttar Pradesh for Two-Wheeler Loans. Uttar Pradesh improved its position from 5th largest to 4th largest state in terms of originations (value) from Q3 FY22 to Q3 FY23, whereas Andhra Pradesh moved from 9th largest to 8th largest state. Madhya Pradesh replaced West Bengal as the 10th largest state by originations (value) in Q3 FY23.
Delhi leads in originations (value) among the top 10 cities for all loan categories except Home loans
According to the report, the top 10 cities contributed to 42% of overall originations (value) in Q3 FY23 for these 5 products. The report also highlights that among the top 10 cities, originations (value) was highest in Delhi NCR for Auto Loans, Two-Wheeler Loans, Personal Loans, and Consumer Durable Loans and in Mumbai for Home Loans