CIBIL: Retail lending market widens

The retail lending market rose significantly over the past year while delinquency rates declined, a CIBIL report said. This comes against the background of banks increasingly moving to retail, as corporate loan asset quality comes under pressure.

The aggregate balance of retail lending products increased 24.5 per cent to reach ~26.1 trillion in the first quarter of 2018-19, mainly due to a 31.3 per cent yearover-year rise in total account volumes, which was somewhat offset by a 5.9 per cent annual decline in average balance per account, according to the report.

Retail lending growth was due to a confluence of positive factors on both the demand and supply side. “Supply is driven by increased focus of banks on retail lending and increased capital availability and focus by non-banking and financial companies. Increasing economic growth and domestic demand is the prime growth driver on the demand side,” according to Yogendra Singh, vice-president of research and consulting, TransUnion CIBIL.

Delinquency rates and 90 or more days past due for major retail lending products saw a fall over the last year.

While delinquency rates for credit cards and home loans rose moderately by 9 basis points and 4 basis points, respectively, loans against property saw a steep rise of 33 basis points.