Banking News

Loans from small time borrowers surge post COVID: Report

Lenders including banks and NBFCs together have lent the most to small time borrowers including micro enterprises in the MSME space and retail individual borrowers post COVID, said a report by credit bureau CRIF Highmark.
The Portfolio outstanding of retail individual loans or consumption loans stands at Rs 78 lakh crore as of Jun’23, up 17.4 percent year on year. Home loans rose 61% in terms of value of originations from FY20 to FY23 Home Loans dominate the market (by Value) and Consumer Durable Loans constitute the least share. The portfolio at risk across various buckets ranged from 0.3 to 2.1 percent as of June 2023.

The Portfolio outstanding of Individual MSME loans stands at Rs 28.5 Lakh crore as of June’ 23 with a year-on-year growth of 13.5 percent according to credit bureau CRIF Highmark in its latest report titled ” How India Lends”. Individual MSME Loans include business loans , property loans, commercial vehicle loans and construction equipment loans. Delinquency improved across all individual MSME Loans except for portfolio at risk where payments is due between 181-360 days for construction equipment loans from June’22 to June’23, the credit bureau said.

” Consumption loans have demonstrated robust growth across categories, with notable increases in Home Loans, Two-Wheeler Loans, and Auto Loans” said Sanjeet Dawar, managing director, CRIF High Mark. “It also observes that Entity MSME lending experienced substantial percentage growth in originations by value, with the micro segment being the largest contributor”.

The Portfolio outstanding of Microfinance Loans stands at ₹3.5 lakh crore as of June’23. MFI Loans are dominated by NBFC MFIs both in value and volume volume followed by banks. Originations by value witnessed an 18% growth from FY20 to FY23. The Portfolio outstanding of Corporate Loans stands at Rs 62.2 Lakh crore as of June’23. Originations by value witnessed a 33 percent growth from FY’22 to FY’23. The report assumes significance as there are concerns across various sections of the economy over an unbridled growth in retail loans.

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