Personal loans segment sees resurgence post Covid: CRIF-DLAI report
- IBEF
- January 23, 2024
The personal loans segment has experienced a noteworthy resurgence post-COVID, notably in categories such as small ticket personal loans (STPL), personal loans, gold loans, and credit cards. According to a joint report by credit bureau CRIF and the Digital Lenders Association of India (DLAI), the cumulative outstanding personal loans in India have more than doubled over the past four years, escalating from US$ 66.2 billion (Rs 5.5 trillion) in FY20 to US$ 143.2 billion (Rs 11.9 trillion) by the end of the first half of the financial year 2024 (H1FY24).
The report highlights the dominance of origination volumes in small ticket personal loans, with observed growth in both the US$ 120.33 (Rs 10,000) to US$ 601.65 (Rs 50,000) range and those exceeding US$ 12,032.97 (Rs 10 lakh). Members of DLAI contributed 7.9% and 19.8% to origination value and volume, respectively, in FY23. Regarding origination volume, loans less than US$ 120.33 (Rs 10,000) have asserted dominance in digital lending, increasing their share from 58.4% in FY20 to 63.2% in H1FY24.
Similarly, the STPL category, with a ticket size between US$ 120.33 (Rs 10,000) to US$ 601.65 (Rs 50,000), has witnessed an expanded share within the digital lending space, rising from 13.9% to 20% during the specified period. Conversely, personal loans with a ticket size beyond US$ 601.65 (Rs 50,000) have gradually declined over the past three years for the overall industry. The contribution of loans with a ticket size of US$ 601.65 (Rs 50,000) to US$ 1,203.30 (Rs 1,00,000) declined from 7.9% to 5.2% in the same period. Examining the trend among DLAI members, the share of loans under US$ 120.33 (Rs 10,000) in the overall pie of personal loans has decreased from 85.3% in FY20 to 62.7% in H1FY24.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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