MUMBAI: Indian consumers and their willingness to borrow to spend would lead to doubling of retail loans in the next five years, says a study by ICICI Bank and rating agency CRISIL.
Looking back at the loan book that grew from Rs 22 lakh crore in FY14 to `48 lakh crore in FY19, the study says, FY19 to FY24 would see doubling of loans to Rs 96 lakh crore.
This rapid increase would come on the back of not just the willingness of consumers to borrow, but also on the data availability on borrowers, credit record and also the ability of the lenders to leverage technology and data analytics.
While customers are opting for more and more unsecured loans that cost very little in terms of upfront payments unlike, say housing loans, lenders have comfort level in extending them due to the credit and many signals of credit-worthiness they are able to monitor.
Credit card loans are projected to grow the maximum at 23 per cent, though growing from a smaller base, followed by personal loans at 22 per cent. Average loan growth of 14-15 per cent is expected, though the signals as far as credit growth right now are not very promising, given the e c o n o m i c slowdown.
“India’s GDP per capita in terms of purchasing power parity (PPP) is now $7,762. Our analysis predicts that this junction will prove to be an inflection point for the country, as it was with another large economies a few years ago,” said Anup Bagchi, executive director, ICICI Bank.
Noteworthy is also the way digital lending is expected to grow — from Rs 2.7 lakh crore in FY19 to Rs 15 lakh crore by FY24.