A recent report by the Centre for Advanced Financial Research and Learning studied the correlation between consumption expenditure and credit growth. Here s what it found.
Lenders in India have tightened risk frameworks, resulting in a decline in approval rates for new-to-credit loan applicants. The share of new-to-credit customers in overall loan origination has dropped by 400 basis points year-on-year to 15% in the April-June period.
As signs of stress emerge in the small-ticket personal loans sector in India, several banks are becoming cautious about engaging in the unsecured lending space. Major banks are witnessing stress in this segment, particularly in loans below Rs 50,000, driven by fintechs. Concerns and expectations of tougher regulations are pushing banks to limit growth and assess the unsecured lending sector carefully