CRIF High Mark Releases Third Edition of Festive Lending Report

CRIF High Mark, a leading Indian credit bureau, today, launched the third edition of its How India Celebrates Report on Festive Lending in India. The FY24 report delves 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 notes originations by value and volume across each product, lender type, and geography. 

Key trends across major consumer lending products:

Below are the key trends observed during the festive season (Q3 FY22, Q3 FY 23, Q3 FY24) across major consumer lending products – Auto Loans, Two-Wheeler Loans, Personal Loans, Consumer Durable Loans, and Home Loans –

·         Auto Loans witnessed 9% growth in originations (value) from Q3 FY23 to Q3 FY24 and 10.7% growth in average ticket size from ₹7.3L in Q3 FY23 to ₹8.1L in Q3 FY24. Very Low and Low-Risk borrowers increased from 50.3% in Q3 FY23 to 54.9% in Q3 FY24. Private Banks and NBFCs witnessed a decline in originations share (value and volume) from Q3 FY23 to Q3 FY24

·         Two – Wheeler Loans witnessed 21% growth in originations (value) from Rs.25.1 K Cr to Rs.30.4 K Cr from Q3 FY23 to Q3 FY24. The report observes that originations (value) in this category typically surge during the festive season every year fuelled by dealer discounts and low interest rates offered during this period. It also highlights a 21% growth in originations (value) with 25% growth in Rural, 21% in Semi-Urban, and 14% in urban geographies from Q3 FY23 to Q3 FY24. Additionally, there is a 7.2% growth in average ticket size from ₹83K in Q3 FY23 to ₹89K in Q3 FY24. Very low and low-risk borrowers increased from 23.3% in Q3 FY23 to 27.1% in Q3 FY24. All lender types Private Banks, NBFC – Captives, and NBFC - Others maintain Originations share (value and volume) during the festive season from Q3 FY23 to Q3 FY24

·         Personal Loans witnessed 13% growth in originations (value) from Rs.205.7 K Cr to Rs.232.2 K Cr from Q3 FY23 to Q3 FY24 and 22.3% growth in originations (volume). The report stated that there is a shifting borrower preference towards smaller ticket loans during the festive season with an 8% decline in average ticket size from ₹74.1K in Q3 FY23 to ₹68.4K in Q3 FY24. Public Sector Banks continue to dominate Originations (value), while NBFCs (Fintechs and Others) are market leaders in terms of Volume. While Private Banks gain a share in volume, NBFCs gain a share in value from Q3 FY23 to Q3 FY24. Furthermore, the proportion of very low and low-risk borrowers increased from 46.5% in Q3 FY23 to 50.6% in Q3 FY24.

·         Consumer Durable Loans witnessed a significant surge with a 27.1% growth in originations (value) from Rs.31.4 K Cr to Rs.39.9 K Cr from Q3 FY23 to Q3 FY24, driven by customers capitalising on the season's discounts and lucrative deals on electronic goods and home appliances. There was a 10% rise in originations (volume) from Q3 FY23 to Q3 FY24. Additionally, there was a significant 16.3% growth in the average ticket size, rising from ₹20.9K in Q3 FY23 to ₹24.3K in Q3 FY24. NBFCs saw an uptick in market share both by value and volume during the festive seasons of Q3 FY22, Q3 FY23, and Q3 FY24. Furthermore, there was a steady rise in the proportion of very low and low-risk borrowers, increasing from 45.2% in Q3 FY23 to 47.6% in Q3 FY24.

·         Home Loans saw an 8.9% growth in originations (value) from Rs.227.1 K Cr to Rs.247.4 K Cr from Q3 FY23 to Q3 FY24. Notably, there was a substantial 17.4% growth in originations (value) for loans exceeding ₹35L. Furthermore, the Average Ticket Size witnessed a significant 9.9% growth, escalating from ₹24.3L to ₹26.6L from Q3 FY23 to Q3 FY24.

Geographic Deep Dive

·         Maharashtra dominates originations (value) in all categories except Two-Wheeler loans

The report highlights that the top 10 states contributed to 72% of overall originations(value) in Q3 FY24 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 elevated its position from 4th largest to 3rd largest state in terms of originations (value) from Q3 FY23 to Q3 FY24, whereas Kerala replaced Madhya Pradesh as the 10th largest state by originations (value) in Q3 FY24.

·         Delhi NCR leads in originations (value) among the top 10 cities for all loan categories except Home loans

According to the report, originations (value) were highest in Mumbai for Home Loans. The report also highlights that BT100 (Beyond top 100) Cities identified as cities with the highest consumer loans portfolio, dominate Two-Wheeler Loans, Consumer Durable Loans, and Auto Loans originations (value) and gained share for Two-Wheeler Loans and Consumer Durable Loans in Q3 FY24

Commenting on the findings of the report Mr. Sanjeet Dawar, Managing Director, CRIF High Mark said "The festive season remains a crucial driver for consumption-based lending in India, benefiting both lenders and borrowers. The festive quarter Oct’23 to Dec’23 has seen sustained growth in originations across key consumer lending segments like Auto Loans, Two-Wheeler Loans, Personal Loans, Consumer Durable Loans, and Home Loans. Moreover, credit demand is not limited to metropolitan areas. In the ‘Beyond the top 100 cities’ category, there is significant growth in loan originations, highlighting the evolving lending landscape shaped by accessibility, attractive offers, and digital innovations."

How India Celebrates – Report on Festive Lending in India is an annual publication from CRIF High Mark. The publication analyses trends in business for major consumer lending products Auto Loans, Two-Wheeler Loans, Personal Loans, Consumer Durable Loans, and Home Loans during the festive season compared to the rest of the year. The festive season is defined as the third quarter of the financial year (Oct-Nov-Dec).