Over the past few years, a section of the vast Indian middle class has reined in spending on non-essentials, amid high inflation and many have been buying consumergoods on credit. One of the key drivers of consumption are unsecured loans that do not require any collateral.
The world of unsecured lending has attracted the attention of the Reserve Bank of India and it has been advised to the NBFCs and HFCs to remain alert in terms of granting consumer credits. Retail loans in the Indian banking sector grew at a compounded annual growth rate of 24.8% between March 2021 and March 2023. Banks unsecured loan portfolio amounted to Rs. 12 lakh crores as on July 2023.
Delinquency rates in case of unsecured loans are not very high, however, responsible lending, continuous portfolio monitoring and controlling concentration risk is essential for sustaining the growth momentum of retails/unsecured loans. Digital and information-oriented lending are fuelling the growth of retail credit, especially unsecured loans. Growing debts and lagging income growth could pose a matter of concern as repayment obligations have been on the rise in the recent times with income levels not picking up at the same pace.
Indcap Advisors has been instrumental in channelising loans (whether secured or unsecured) for its clients and fuelling their growth. We have in place an efficient time who will hear you out and advise on the best possible source of funding for your organisation keeping in mind the liquidity health of your business.
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Data –
- https://bfsi.economictimes.indiatimes.com/news/financial-services/unsecured-loans-are-on-the-rise-as-indian-aspirations-meet-easy-borrowing-do-lenders-and-households-need-to-be-cautious/103551344
