Retail loans to reach Rs 96 trillion in 5 years, says an ICICI Bank, CRISIL report

The retail loan book of financiers in India will double to reach Rs. 96 trillion by March 2024, as compared with Rs. 48 trillion in March 2019, says an ICICI Bank report powered by CRISIL.

ICICI Bank

The report reveals through its prediction that this rapid growth will take place in the next five years on the back of inflated demand for private consumption (such as home, car, consumer durables, credit cards etc), the willingness of consumers to take loans, increased availability of various consumer data, improved usage of data analytics and regulatory initiatives propelling growth in low-cost housing loans and MSME (Micro, Small & Medium Enterprises) loans.

Titled, ‘Mining the Golden Opportunity in Retail Loans’, the report shows in-depth insights into growth drivers of each retail asset class and underlines the major economic, regulatory and technological interventions that will drive the expansion of the retail loans market.

Key highlights of the report, launched in Mumbai at the Bank’s headquarters on December 17, are as follows:

  • Mortgage loans market—normal & low-cost housing and loan against property—is expected to double to Rs 46.1 trillion in FY24
  • Unsecured loans — personal loan and credit cards—to more than double to Rs 13.8 trillion in FY24
  • Loans to MSMEs are likely to more than double to Rs 13.2 trillion
  • Vehicles—commercial vehicle, four and two-wheeler—loans are tipped to nearly double to Rs. 17.5 trillion

Anup Bagchi, Executive Director, ICICI Bank says, “India’s GDP per capita in terms of purchasing power parity (PPP) is now $7762. Our analysis predicts that this junction will prove to be an inflexion point for the country, as it was with another large economy a few years ago. We foresee that in the next five years, the domestic retail loans market is poised to double to Rs 96 trillion.”

Amish Mehta, Chief Operating Officer and President, CRISIL says, “Growth is expected to be higher in smaller cities outside the top 50 cities. We expect players with a strong funding franchise, distribution heft, superior underwriting skills, strong focus on technology and balanced mix of secured and unsecured loans to be ahead of the pack in the retail loans sweepstakes. The top five players are foreseen continuing their dominance of the market, across asset classes. For example, in housing loans, despite the market having over 100 players, the top five players alone have a cumulative market share of over 50 percent.”

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