Growth in India's consumer credit market continued to decelerate in the second quarter, driven primarily by secured lending products. As well, non-banking financial companies (NBFCs) remained under stress, with a recent portfolio shift to higher-risk unsecured credit, according to the newly-released TransUnion CIBIL CY Q2 2019 Industry Insights Report.
NBFCs, which have played a key role in consumer credit growth in recent years, saw slower growth in the second quarter compared to banks. NBFCs continued to face difficult funding challenges and consequently have been shifting their origination strategy away from larger-value loans to smaller-ticket personal loans.
Consumer credit balances across all major credit products grew 17.1% year-on-year (YoY) in Q2 2019, compared to 23.5% YoY in Q2 2018. Growth in credit cards and personal loans significantly outpaced increases in auto loans, home loans and loans against property (LAP). The total number of consumers with access to credit increased by 21.7% YoY in Q2 2019, which, although still quite high in comparison to most major economies worldwide, was down materially from the 26.3% jump YoY in Q2 2018.
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