How India Lends FY23 reports, Home Loans dominate with 40.7% share by value, while Personal Loans lead the market by volume under the consumption lending category

Mumbai, January 29, 2024: CRIF High Mark, a leading Indian credit bureau, launched the third edition of its How India Lends report today. The report deep dives into Consumptions Lending, MSME Lending, and Microfinance Lending for the last five years (FY20 to Q1 FY24) with an emphasis on key insights into the industry and consumer trends. Additionally, the report weighs in on the trends of last few years in comparison to pre-COVID-19 on the lending landscape.

Consumption Lending includes Home Loans, Personal Loans, Two-Wheeler Loans, Auto Loans, Consumer Durable Loans and Credit Cards. Entity MSME Loans are defined based on entity level credit exposure of upto ₹50 Crore. Corporate Loans refer to loans given to Mid and Large-size entities with credit exposure of more than ₹50 Crore and are reported to the Commercial Bureau. Individual MSME Loans include Business Loans (BL), Property Loans (LAP), Commercial Vehicle Loans (CVL) and Construction Equipment Loans (CEL).

Insights into Trends and Patterns Shaping Major Lending Product Categories in India 

  • Consumption Loans:
    The Portfolio outstanding of Consumption Loans stands at ₹78 Lakh Cr as of Jun’23

  • Home Loans: 
    Shift in Originations (by value and volume) from ticket size ₹ 5L - ₹ 35L to ₹ 35L - ₹ 75L
    Growth of 22% in Average Ticket Size (ATS) from ₹20.2L in FY20 to ₹24.7L in FY23

  • Personal Loans:
    150% growth in Originations by volume from FY20 to FY23
    Banks dominate Originations (by value) and NBFCs dominate Originations (by volume)

  • Two-wheeler loans:
    36% growth in Originations by value from FY20 to FY23
    130% Growth in Originations share (by Value) and 220% Growth in Originations share (Volume) for ₹75K+ from FY20 to FY23

  • Auto Loans:
    Witnessed 63% growth in Originations (by Value) from FY20 to FY23
    Shift in Originations (by value and volume) can be seen from ticket size <₹10L to ₹10L+ from FY22 onwards partially due to an increase in vehicle prices during the period

  • Consumer Durable Loans:
    57% growth in Originations by value, and 51% growth by volume from FY20 to FY23
    While NBFCs dominate the category, there is a continuous Y-o-Y increase in Originations share for Private Banks

  • Credit Cards:
    69% growth in new cards issued from FY20 to FY23
    Growth in the share of Private Banks from FY22 onwards


MSME Lending:

Individual MSME Loans

  • The Portfolio outstanding of Individual MSME Loans stands at ₹28.5 Lakh Cr as of Jun’23 with a Y-o-Y growth of 13.5%
  • ATS for Indv. MSME increased from ₹5.8L from FY22 to ₹6.9L FY23
  • Delinquency improved across all Indv. MSME Loans except for PAR 181-360 for CEL from June’22 to June’23

Entity MSME Loans

  • The Portfolio outstanding of Entity MSME Loans stands at ₹26 Lakh Cr as of Jun’23
  • Entity MSME Loans dominated by Private Banks by value and Public Sector Banks by volume
  • The sector witnessed the highest Originations Value in recent quarters, with the Micro Segment being the largest contributor

Microfinance Lending:

  • The Portfolio outstanding of Microfinance Loans stands at ₹355.3 K Cr as of Jun’23. MFI Loans are dominated by NBFC MFIs (value and volume) followed by Banks.
  • Originations by value witnessed an 18% growth from FY20 to FY23
  • The sector witnessed an increase in ATS from ₹34.6K in FY20 to ₹41.1K in FY23

Corporate Lending (Only Entity):

  • The Portfolio outstanding of Corporate Loans stands at ₹62.2 Lakh Cr as of Jun’23
  • Originations by value witnessed a 33% growth from FY22 to FY23

Commenting on the report Mr. Sanjeet Dawar, Managing Director, CRIF High Mark, said, "The third edition of the report, 'How India Lends - FY2023' presents insights into the current credit market bringing into focus the trends that have been shaping the lending ecosystem during the past year. The report states that Consumption loans have demonstrated robust growth across categories, with notable increases in Home Loans, Two-Wheeler Loans, and Auto Loans. It also observes that Entity MSME lending experienced substantial percentage growth in originations by value, with the Micro Segment being the largest contributor. These trends, combined with an encouraging improvement in delinquencies, thus, reflect the resilience of the Indian economy.