Unsecured loans to continue your advance.

Between the financials of 2015 and 2018, unsecured loans, including loans to individuals, small and medium-sized businesses (SMEs), and credit cards, experienced a compound annual growth rate (CAGR) of 27%, or almost four times the growth of bank loans of around 7%. This comes at a time when banks are reeling from the weight of bad business credit. As of March 2018, outstanding unsecured debt was around Rs 500 million, accounting for 26% of retail loans, up from 21% three years ago.

Unsecured loans are growing at a healthy rate

CRISIL Research expects the total unsecured loan portfolio to reach a CAGR of 24-25% to Rs 9.5 billion over the next three years, thanks to increased penetration in the next three years, in existing markets and a concentration growing number of lenders. in small towns.

Important growth factors

The growth of this segment is due to a variety of factors, such as:

1. »Increase in discretionary spending by Indian consumers, visible in the growth of private final consumption spending (CCTB) with a CAGR of 11% in the last three years and an increase in foreign tourists to India with a CAGR of 9, 4% from Fiscal Year 11 to Fiscal Year 16.
2. “Increased availability of credit reporting information, as evidenced by the steady increase in the number of records in a credit reporting agency's database from approximately 150 million in March 2010 to more than 600 million in March 2018.
3.  “Technology has made it possible to speed up internal processes and reduce the processing time (TAT) of loans to SMEs from 15 days to 2-3 days. For unsecured personal customer loans, many players have pre-approved loan offers ready to check out.
4.  "Reduced interest rates in certain segments, eg B. Class A first-class corporate/corporate personal loans, which have contributed to an increase in payments.
5.  Growing adoption infrastructure (use of point-of-sale terminals) and growth in organized retail, which has stimulated the use of credit cards, reflected in a 10% increase in spending per average CAGR of credit cards. credit between the fiscal year 2015 and fiscal year 2018.
6.  »Moderate home prices, limited availability of collateral, and easy availability of credit have led to increased demand for unsecured SME loans.