In line with the higher uptake of India’s vaccination programme combined with a less severe wave of COVID-19 in early 2022, local consumers regained greater mobility outside of the home, leading to the resumption of daily activities. This scenario has boosted their confidence to spend and apply for credit in the form of card lending and other personal lending, in particular.
Card lending remains the most dynamic performer within consumer credit in 2022, and continues to attract consumers due to increasing discounts and special offers. With an expanding base of Indians shopping online, the discounts and offers by credit card players is helping to drive the double-digit growth of card lending for a second consecutive year.
Mortgages/housing gross lending bounced back in 2021 from a notable slowdown in the first year of the pandemic with double-digit growth. With the demand for real estate starting to improve in the second half of the year in line with strengthening consumer sentiment, many of the leading banks significantly reduced their home loan rates to attract increasing demand from consumers looking to invest in a property.
The consumer lending competitive landscape in India has a strong mix of public banks, private banks and non-banking financial institutions(NBFCs). While public banks tend to focus on offering mortgages/housing loans, private banks have a significant presence in card lending, driven by credit cards.
With an expanding youth population, financial literacy in India is expected to increase, which will benefit consumer lending over the forecast period. As the banked population grows and the government pushes towards a cashless society, growing numbers of consumers are expected to take out card lending products, with this category set to remain the most dynamic performer.
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Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.See All of Our Definitions
This report originates from Passport, our Consumer Lending research and analysis database.
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