First-time borrowers deepen credit reach: Credit uptake among eligible Indians more than doubled to 74% in March from 35% in 2017
TransUnion Cibil, India’s largest credit information company, pegged the credit eligible population at 890 million as of this March. About 74% of them took credit at some point in their lifespan while 13% are first time borrowers.
The share of eligible Indians availing credit at least once more than doubled to 74% this March from 35% in March 2017.
Consumer durable loans are the leading entry point for new-to-credit customers who take consumption-related loans, accounting for about 46% of originations to first-time borrowers by volume in the first quarter of this fiscal year, followed by gold loans at 18.3%, CRIF High Mark said in a report.
India is witnessing a rapid rise in access to consumer durable loans backed by expansion of digital lending platforms, point-of-sale financing and retailer partnerships.
Microfinance loans are another entry point for new-to-credit customers.CreditAccess Grameen, the country’s largest non-banking financial company-microfinance institutions (NBFC-MFI), added about 980,000 borrowers, with 38% being new-to-credit, said Ganesh Narayanan, managing director.
Several other NBFC-MFI, which had either stopped or slowed lending to the new-to-credit segment at the peak of the sectoral asset quality stress, are now raising their stakes with first time borrowers, according to chief executives.
New-to-credit customers are those who don’t have prior borrowing history or footprint in the credit information bureau.
Within the consumption loan basket, personal loans came third with an 18% share in terms of contribution to creating accessibility to first time borrowers. Two-wheeler loans accounted for 11% of the total in the first quarter, CRIF High Mark data showed.
Credit penetration beyond the top 100 locations also deepened, raising the access to institutional credit for all. Two-wheeler loans recorded the highest penetration at 53% beyond the Top 100 cities, while consumer durable penetration rose to 43.5% in Q1 FY27 from 40.8% a year prior.
Overall, India’s retail credit portfolio expanded to ₹179 lakh crore in the June quarter, clocking a 19.2% year-on-year growth. Gold loans recorded the highest increase at 62.2%, followed by consumer durable loans at 36.6%, sole-proprietor loans at 24.4%, and auto loans at 18%.
