Personal loans jump, business loans fall in FY22

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Chenai: The issuance of personal loans – new sanctioned loans – increased 122% in volume in FY22, indicating that more people applied for credit to bounce back from the pandemic.

However, corporate loan origination volumes were down 22% in FY22 compared to the prior year.

Personal loans grew 46% in originations in value and 122% in volume from FY21 to FY22, according to a report from credit information provider CRIF High Mark.

Personal loans in volume increased from 286 lakh in FY21 to 633.9 lakh in FY22. Part of the growth is also due to weak base effect. Loan origination volumes, which have been growing for the past few years, fell in FY21 due to nationwide lockdowns. From 401 lakh originations in FY20, it had fallen to 286 lakh in FY21. Origin values ​​also fell in FY21.

The majority of personal loans, 85%, had a note size below Rs 1.0 lakh, up 13% from 75% a year ago. The share of higher value loans decreased in FY22.

In the case of corporate loans, origination volumes fell from 60.2 lakh in FY21 to 47.1 lakh in FY22. The decline was mainly due to the second wave of Covid in the second quarter. However, in terms of value, there was a 10 percent growth in origination.

Among retail lending categories, home loan origination volumes grew more than in previous years, while two-wheeler and auto loan volumes declined from FY20 levels, despite growth in during fiscal year 21.

The total loan market size in India as of March 22 stood at Rs 174.3 lakh crore, representing a growth of 11.1% from March 2021. In March 2022, commercial, retail and microfinance institutions accounted for 49.5%, 48.9% and 1.6%, respectively, of total loans.

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