Consumer Lending in India

Economic growth and demographic trends drive consumer lending

Consumer lending has grown at a healthy pace in India; and this trend is expected to continue in the forecast period. The country’s growing economy, rising disposable incomes and changing lifestyles have resulted in higher disbursals of auto and durables loans.

Alternative finance providers increase their share of consumer loans

Alternative finance providers, such as non-banking finance companies (NBFCs), have been playing an increasingly important role in providing consumer loans. These financial institutions are more popular for loan disbursals in regions that are not serviced adequately by banks.

New government policies in 2015 boost mortgages/housing

Mortgages/housing registered strong current value growth in the review period, supported by the increasing demand from the urban middle classes to own homes as well as favourable government policies. For instance, the government’s Pradhan Mantri Awas Yojna (PMAY) low-cost housing policy, rolled-out in 2015, was formulated to facilitate universal home ownership.

Indian consumers demonstrate sound loan repayment record

Low non-performing loans (NPAs) across consumer lending categories demonstrate that Indian consumers are debt-averse and exhibit good loan repayment records. For instance, the share of credit card and non-card non-performing loans (NPAs) remained low in 2018.

Aspirational consumer class fuels consumer lending

The key trends in consumer lending are expected to continue in the forecast period. Consumer credit outstanding balance is expected see strong value growth at constant 2018 prices over the forecast period.

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