India’s consumer credit market is expected to grow faster than major global economies (Report)

India’s credit ecosystem remains resilient despite the pandemic, revealed the latest joint report titled “A Review of India’s Credit Ecosystem” by Experian, the world’s leading information services company, and Invest India, the agency. national investment and facilitation system.

The “A Review of India’s Credit Ecosystem” report highlighted several key trends in the lending industry, including a key trend where the Indian consumer credit market is expected to grow at a faster rate than most of the major economies in the world. world. According to the statement released on Wednesday by Experian and Invest India, the projected growth will be driven by a shift in India’s demographics, with a burgeoning affluent middle class increasing private consumption, as well as the growth of rural populations, all catalyzed by technology. .

Recognizing the market gaps for unbanked and underserved populations, the report explored how NBFCs and fintechs have transformed the credit landscape to meet the financial needs of these consumers. The report also highlighted the regulatory environment supporting India’s credit ecosystem throughout the pandemic.

Data in the report, which tracked India’s credit ecosystem from March 2017 to February 2021, highlighted a V-shaped recovery in Indian markets, with gradual and steady improvement in supply trends. .

The new sourcing crossed the pre-COVID-19 level in October 2020; however, supply volumes declined from January 2021 due to the second wave of COVID-19 and imposed lockdowns. A remarkable recovery was observed for all unsecured credit products.

The recovery of personal loans has been high in the low (Rs 1 Lakh) and high (Rs 5 Lakh) banknote size segments, while the recovery of larger loans is also improving steadily. The credit portfolio has shown resilience, in February 2021, growth was 8% year-on-year for the core product portfolio, lower than the 13% observed in March 2020. The pace of growth slowed, however, for all products. , unsecured products experiencing a faster annual growth rate than secured loans, the statement said.

Neeraj Dhawan, Managing Director of Experian India, speaking about the report, said: “The behavioral change of the Indian population has been tremendous over the past five years. the main driving force behind the mass market. “

He noted that technological adaptation is abrupt, which in turn has led to acceptance of new financial tools.

“The biggest beneficiary of this change is the credit market, which is moving towards a self-generated and self-sustaining market. Consistent with this trend, the risk appetite of traditionally conservative lenders increases as the credit horizon widens. range of innovative solutions that help businesses assess their credit, make smarter lending decisions, and protect themselves and their customers from fraud, Experian is at the forefront and one of the key catalysts for this. change, ”added Shawan.

According to Deepak Bagla, Managing Director and CEO of Invest India, India is making giant strides in financial inclusion.

“The rise of the affluent middle class and the growth of the rural economy are changing consumption patterns and driving most of the consumption growth in India. In addition, rapid technological advancements have further accelerated the growth of the credit ecosystem. The report attempts to advance credible and practical information about the credit industry in these unprecedented times. This report which illustrates the joint commitment of Experian and Invest India to advancing excellence in the Indian credit system, ”said Bagla.

The report also highlighted various factors in the Indian economy such as consumer demand fueled by credit; increased purchasing power of an average Indian; change in the demographic profile of the consumer; changing customer landscape with the growing role of fintech.