365Telugu.com online news,India,January 29th, 2025: India’s retail credit growth experienced a slowdown in the quarter ending September 2024, as reported by the latest TransUnion CIBIL Credit Market Indicator (CMI).

The moderation is attributed to a dip in credit demand and a reduction in credit supply across most loan products. Consumption-led loans, such as personal loans, credit cards, and consumer durable loans, showed a higher rate of delinquency compared to the same period in 2023.

The CMI, a tool that tracks credit market health across demand, supply, consumer behavior, and performance, recorded a value of 100 in September 2024, down from 103 in September 2023. While the indicator remained above 100, the cooling in credit demand and supply constrained overall growth.

Key Trends in Retail Credit Supply

Credit supply, measured through loan originations, saw a year-over-year (YoY) decline for most consumption-driven loan products, with personal loans being a notable exception, though their growth rate slowed significantly.

Loan ProductOrigination Growth (YoY, Sep 2024)
Home Loans-10%
Loans Against Property (LAP)+3%
Auto Loans-3%
Two-Wheeler Loans+4%
Personal Loans+11%
Credit Cards-24%
Consumer Durable Loans-6%

Credit originations in the consumption loan segment fell sharply, with total origination values declining by 20% for credit cards and 5% for personal loans. This resulted in the CMI supply pillar dropping to 91, the lowest in three years.

Moderation in Loan Portfolio Growth

Portfolio balances continued to grow YoY, albeit at a slower pace across all loan products except credit cards. Credit cards saw a 34% growth in September 2024, up from 26% in the same period of 2023, as consumers relied more on existing credit lines amid declining new loan originations.

Loan ProductYoY Growth in Balances (Sep 2024)
Home Loans14%
Loans Against Property22%
Auto Loans20%
Two-Wheeler Loans29%
Personal Loans14%
Credit Cards34%
Consumer Durable Loans23%

Mixed Performance in Delinquencies

Delinquency rates (90+ days past due) showed improvement for secured loans such as home loans and auto loans but worsened for consumption-led loans like credit cards and consumer durable loans.

Loan Product90+ DPD (Sep 2024)YoY Change
Home Loans0.9%-18 bps
Loans Against Property1.7%-42 bps
Auto Loans0.6%-3 bps
Two-Wheeler Loans2.1%-3 bps
Personal Loans1.4%+14 bps
Credit Cards2.0%+31 bps
Consumer Durable Loans1.5%+9 bps

Notably, borrowers holding both secured and consumption-led loans showed early signs of financial stress. Around 4.1% of these borrowers had overdue EMIs on consumption loans, up from 3.9% the previous year, indicating potential risks for secured loan portfolios in the future.

Lender Insights and Strategies

Mr. Bhavesh Jain, MD and CEO of TransUnion CIBIL, emphasized the importance of leveraging data analytics to mitigate risks and identify low-risk, creditworthy borrowers. “Customized solutions that align with evolving consumer needs can help lenders achieve sustainable growth while maintaining financial stability,” he added.

To address the rising delinquencies, lenders are advised to focus on active portfolio monitoring and dynamic strategies tailored to evolving market conditions. Identifying creditworthy consumers and offering suitable products can foster economic activity while safeguarding asset quality.