India's retail lending showed moderated growth during quarter ending Sept 2023

New Delhi : India’s retail lending showed moderated growth during the quarter ending September 2023 as financial institutions tightened the supply of credit, especially on consumption-led products like credit cards, consumer durable loans, and personal loans.

Credit performance, as measured by balance-level delinquencies, improved across most products, apart from credit cards and personal loans, as per TransUnion CIBIL Credit Market Indicator (CMI) report for September 2023.

The CMI findings showed a year-over-year (YoY) decline in the growth rate of overall originations, resulting in a marginal decline in the CMI supply index from 98 in September 2022 to 95 in September 2023.

Growth of consumption-led credit products moderated in the quarter ending September 2023, including personal loans. Home loans have shown 9% growth in value in the quarter ending September 2023, compared to the same period in the previous year.

However, in terms of volume, low value home loans which form 76% of originations, have dropped by 4%, impacting overall home loan originations growth. It is important to note that the share of new-to-credit (NTC) consumers in originations dropped from 17% in the quarter ending September 2022 to 14% in the quarter ending September 2023, resulting in a decrease in share of NTC origination volumes from 12% in the quarter ending September 2022 to 10% in the quarter ending September 2023.

Overall balance-level serious delinquencies (measured as 90 days or more past due) continued to improve across product categories, except for marginal deterioration in credit cards and personal loans.