Retail loans expected to double in next 5 yrs: ICICI-CRISIL Report

According to a recent study conducted in collaboration by private sector lender ICICI Bank and rating agency Crisil, it is estimated that retail loan book of financiers in India will double to Rs 96 trillion by March 2024, in comparison to Rs 48 trillion in March 2019. 

As per Anup Bagchi, Executive Director, ICICI, this is due to, “We believe that this rapid growth will take place in the next five years on the back of increased demand for private consumption and the willingness especially from the youth to take loans. Also, we are witnessing the trend of urbanisation and nuclearisation, which we believe will drive the demand”.  The study report is a work culminated from assessing interviews with 200 experts from the retail loans industry, ICICI Banks deep understanding of the consumer finance category, Crisils proprietary economic projection models, publicly available company disclosures, annual reports and industry data from RBI among others.

He continued that there are various factors that have contributed to this growth. It includes the regulatory and legislative measures adopted by the government that have propelled growth in low-cost housing loans. Bagchi also said, “Besides, the initiatives like GST has resulted in MSMEs availing more funding and thus the loans to this sector have also gone up.” According to the report an upcoming hike in loan demand is observed. As per Amish Mehta, Crisil COO and President, the expectation of the doubling of retail loans is also based on the expectation of the GDP estimated to grow to 6.5-7 per cent.

The report suggests that, banks will dominate the market, accounting for 77 % of total digital lending along with new private banks that are expected to gain market share from their public sector peers. It also noted that mortgage loans market, normal and low-cost housing and loan against property is expected to double to Rs 46.1 trillion in FY24. Further, unsecured loans – personal loans and credit cards are expected to more than double to Rs.13.8 trillion in FY24 while the credits to MSMEs are likely to more than double to Rs.13.2 trillion. Also, vehicles commercial vehicle, two and four wheeler loans are tipped to nearly double to Rs.17.5 trillion.

Bagchi said that in the wake of rising loans, the availability of large data from traditional and non-traditional sources is helping financiers leverage technology and data analytics which has allowed lenders to lend with confidence. 


According to the report, the other key drivers include enhancing focus on digitization of ownership of land records and providing access to the same to financial institutions with requisite consent, greater thrust on digital payments and developing industry-wide standards on key aspects such as innovation hub and environment, data security, customer privacy, consumer protection and loan pricing.

Based on the key drivers aforementioned, the report forecasted that digital lending will increase to Rs.15 trillion by the Financial Year 2024 which is estimated at Rs 2.7 trillion as of March 2019, representing 16% of retail lending.

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