CRIF Report Shows that India’s Lending Growth Moderates in FY25 as Borrowers Shift to High-Ticket Credit

News Desk, News Nation 360 : CRIF High Mark published its "How India Lends: FY25" annual report. It offers information on India's credit environment. It includes different loan types. In FY25, the credit scenario was complex. The overall outstanding loan portfolio increased. New loan value increased at a slower pace. This indicates shifting borrower choices. Lenders tightened their belts. High-ticket loans picked up popularity. Small-ticket lending has reduced. This happened because of increasing inflation. Affordability concerns also played a part. Tighter risk controls existed. Public Sector Banks and NBFCs gained market share. Private sector banks lost some ground. Lenders became more risk-averse. Early-stage loan stress was better in some portfolios. Later-stage defaults continued to be a challenge. Particularly, this was the case in low-value and subprime areas. Focusing on retail loans, housing loan origination growth decelerated to 2.6% year-on-year. Increased property prices and economic issues impacted volumes. Public Sector Banks picked up market share in home loans. Private banks lost market share. New home loans veered towards higher-value loans. Early indicators of stress improved for all lenders. Nevertheless, small-ticket loans below ₹5 lakh continued to reflect high delinquency risks. Personal loan originations fell by 2.6% in value. This indicates greater caution due to increased defaults. NBFCs captured considerable market share in personal loans. High-value personal loans grew. Lenders experienced increasing stress in the ₹1 lakh to ₹5 lakh bucket. Early and mid-cycle delinquencies deteriorated for the majority of lenders. Growth in two-wheeler loans decelerated to 10.6% in FY25. Subprime borrowers' stress and stricter credit norms resulted in increased defaults. Auto loans increased by just 5.2% year-on-year. This was a sharp decline. Low consumer off-take led to this deceleration. High-value car loans account for nearly half of new loans. Public Sector Banks handled risk effectively in car loans. Private banks reigned over early-stage defaults. Consumer durable loan originations recorded a modest 3.3% value growth. NBFCs dominated this space once again. Credit card originations fell sharply by 26.4% in FY25. This came after two years of high growth. Private banks' share declined in new credit card initiations. That suggests higher competition.

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