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India’s retail credit growth moderated in the quarter ended June 2024, as financial institutions tightened the supply of credit, particularly on consumption-led products like credit cards, consumer durable loans and personal loans.
Credit information company TransUnion CIBIL’s Credit Market Indicator (CMI), released on Monday, showed that growth slowed across all credit products, particularly on small ticket loans.
Credit performance, as measured by balance-level delinquencies, improved across most products, apart from credit cards. Credit cards showed only a marginal increase in delinquencies, continuing the trend set over the last four quarters.
While overall credit processing/origination continued to grow at a moderated rate, home loan originations dropped by 9% in volume, while credit card originations declined by 30% YoY. Two-wheeler loans were
the only credit product which had a double-digit growth
in volume and value
originated.
Managing Director and CEO of TransUnion CIBIL, Rajesh Kumar, said, “Timely regulatory guidance and given the relatively high credit-deposit ratio, we are witnessing a moderation in retail credit growth. Lenders can now look at identifying pockets of deserving consumers across risk segments to provide access to credit for them while driving the next phase of sustainable retail credit growth.”
The CMI for June 2024 was 101, which was the same as that in June 2023. The indicator has remained consistently above 100 since June 2022, showing healthy retail lending trends in India.