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Mumbai: More than 16 million Indians are considered credit underserved, according to credit bureau TransUnion Cibil, highlighting the potential loan and credit card market in the country.
TransUnion Cibil, in a report on Monday, said that of the 81 crore Indians eligible for credit, 40 are outside the formal credit system. This half does not have the required track record and poses a challenge for lenders to extend credit. Another 18 crores are already receiving formal credit, and this does not include the six crores recently acquired by banks that have not yet taken out loans. The remaining 16 crore are “underserved credits” or those who are credit rated and can increase their participation in formal lending.
TransUnion Cibil research showed there had been a significant increase in the number of consumers served by credit, from nine crore in 2017 to 18 crore in 2021, bringing estimated levels of credit served from 12% to 22% of the adult population. Lack of credit score and credit history for unserved consumers is a barrier to obtaining credit opportunities, as many lenders are reluctant to extend credit to consumers without a credit history or credit score. Meanwhile, the share of underserved customers has increased from 15% in 2017 to 20% in 2021.
“The Indian retail credit market is undergoing rapid change supported by the speed and scale of digital transformation. This transformation, coupled with India’s demographic dividend, has created unprecedented opportunities to drive growth and financial inclusion in the market,” said Rajesh Kumar, Managing Director and CEO of TransUnion CIBIL. “Our study aims to uncover the significant potential for faster and more sustainable financial inclusion across India. This helps market participants better understand how many people are truly credit underserved, while determining pathways for them to obtain more credit opportunities.
Mumbai: More than 16 million Indians are considered credit underserved, according to credit bureau TransUnion Cibil, highlighting the potential loan and credit card market in the country.
TransUnion Cibil, in a report on Monday, said that of the 81 crore Indians eligible for credit, 40 are outside the formal credit system. This half does not have the required track record and poses a challenge for lenders to extend credit. Another 18 crores are already receiving formal credit, and this does not include the six crores recently acquired by banks that have not yet taken out loans. The remaining 16 crore are “underserved credits” or those who are credit rated and can increase their participation in formal lending.
TransUnion Cibil research showed there had been a significant increase in the number of consumers served by credit, from nine crore in 2017 to 18 crore in 2021, bringing estimated levels of credit served from 12% to 22% of the adult population. Lack of credit score and credit history for unserved consumers is a barrier to obtaining credit opportunities, as many lenders are reluctant to extend credit to consumers without a credit history or credit score. Meanwhile, the share of underserved customers has increased from 15% in 2017 to 20% in 2021.
“The Indian retail credit market is undergoing rapid change supported by the speed and scale of digital transformation. This transformation, coupled with India’s demographic dividend, has created unprecedented opportunities to drive growth and financial inclusion in the market,” said Rajesh Kumar, Managing Director and CEO of TransUnion CIBIL. “Our study aims to uncover the significant potential for faster and more sustainable financial inclusion across India. This helps market participants better understand how many people are truly credit underserved, while determining pathways for them to obtain more credit opportunities.
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