Personal loan, a financial product which has been around forever is set to grow by leap and bounds. The past decade has witnessed the growth of the personal loan industry from a high-risk business to a fertile space inhabited by numerous lenders and borrowers. Fintech lenders have also made an aggressive move into this fertile personal loan space.
According to the Reserve Bank of India (RBI), personal loans accounted for a record 96 percent of incremental non-food credit in the last financial year.
Here’s a Roundup of Personal Loan Statistics for 2018
- Personal loans grew at 20.4 percent between February 17, 2017 and February 18, 2018.
- Between the fiscal year 2015 and 2018, unsecured loans comprising of personal, small and medium enterprise (SME) and credit card loans clocked a compound annual growth rate (CAGR) of 27 percent or almost four times growth in bank credit.
- Unsecured finance, which includes personal loans and credit card debt, amounted to ₹ 576,600 crores or $82 billion at the end of FY18. To put that number in perspective, it’s almost twice the inflow of foreign direct investment ($44.86 billion) in fiscal 2018.
- Non-food credit was up by ₹ 2.44 trillion during the first 10-and-a-half months of FY18, ended February 16, 2018. Of this, ₹ 2.34 trillion was accounted for by personal loans.
- Credit cards and personal loans have risen by 28.3 percent and 26.9 percent, respectively.
- The number of consumers with loans rose to 6.54 crores as of December 2017, from 5.27 crore a year earlier.
- Compared to last year’s first quarter, the number of live accounts grew by 31 percent in the first quarter of 2018.
- Delinquency rates for the first quarter of 2018 remained stable compared to last year, with a marginal drop in auto and consumer durable loans.
- Mobile-enabled purchase journeys were shorter than offline purchases by 22 percent for credit cards, 17 percent for insurance and 8 percent for loan categories.
- The aggregate balance of all retail lending products increased by 27.3 percent over the past year to ₹ 27.9 lakh crore as of June 2018. The increase was a result of a 26.2 percent year-over-year increase in total account volumes, accompanied by a small 0.9 percent growth in average balance per account.
- The share of unsecured retail loan products had risen to 74.4 percent of the volume of new loan origination in the January-March 2018 period, as compared with 73.4 percent a year ago and 65.3 percent in January-March 2016.
- While younger customers, in the 20-29 age group formed about 19 percent of the population that had accessed retail lending products, their share to total loan balances was much lower at 8 percent.
The world of finance is fast becoming aggressively competitive. So far, the personal loan has been doing good. It has adapted to new changes really well. As we are nearing the end of 2018, there’s much more that can unfold in 2019. It’ll be interesting to see how the personal loan sector will evolve in an industry that is constantly going through change. Let’s wait and watch!