Retail credit growth in India remained moderate in Q3 2024 due to declining loan demand and tighter credit disbursement, with consumer loan defaults rising despite stable secured loans.
Retail Loan Growth in India Remains Moderate
Kochi: The overall decline in loan demand growth and reduced credit disbursement in lending programs were key factors behind the moderate growth of retail credit in India during the quarter ending September 2024, according to Bhavesh Jain, Managing Director and CEO of TransUnion CIBIL. Compared to the same period in 2023, consumer loans— including credit cards, personal loans, and consumer durable loans— showed a decline. These findings were highlighted in the TransUnion CIBIL Credit Market Indicator report for the quarter ending September 2024. The Credit Market Indicator stood at 100 in September 2024, lower than 103 recorded in September 2023.
Although the indicator had consistently remained above 100 since September 2022, subdued loan demand and tighter credit disbursement led to sustained moderation. While loan demand growth remained positive, it reached its lowest level in two years. Additionally, most lending programs saw a decline in loan disbursement. Apart from credit cards, portfolio balances across all loan categories grew at a slower pace. Despite a year-on-year decline in delinquencies on secured loans, defaults among consumer borrowers increased, underscoring the need for active portfolio management.
Several factors have impacted India’s lending market, including global economic challenges, a slowdown in urban consumption, and regulatory measures designed to stabilize the credit-deposit ratio, Jain noted.
