NBFCs' loan sanctions up 5% YoY in Q3FY22: Data

Consumer credit drives action; commercial segment shows modest growth, according to FIDC-CRIF data

Non-banking finance companies reported a modest five per cent growth year on year basis in sanctions driven mostly by consumer segments including personal loans in the third quarter ended December 2021 (Q3FY22), according to FIDC-CRIF data.

Loans for commercial purposes, viz., loans against property, commercial equipment loans and business loans have shown modest or negative growth. It signifies that investment demand is yet to pick up among MSMEs and other commercial sectors. The unsecured business loans saw just seven percent rise in sanctions at Rs 17,619 crore and sanctions in equipment financing expanded by eight per cent to Rs 1,293 crore in Q3FY21.

Finance Industry Development Council and CRIF in statement said the growth has been by and large led byFY consumption loans – auto, personal loans and consumer loans. Commercial vehicle loans have now reached pre-pandemic levels of sanctions.  

The sanctions in personal loans were up 60 per cent to Rs 27,985 crore and consumer loans rose 33 per cent YoY to Rs 19,658 crore in Q3FY22.

The loan against shares (LAS) showed a sharp reduction, perhaps as a result of RBI signals on loans against shares. It shrunk by 23 per cent YoY to Rs 1,107 crore in Q3FY22.

Seen from a rural-urban classification angle, the semi-urban areas showed a 19 per cent YOY growth in sanctions, followed by 13 per cent in rural communities. The performance in the Urban region was actually a drag with three per cent contraction. The quantum of loans is much less in rural and semi-urban areas than urban regions so adverse trends in cities pull down the overall performance.

The smaller states (in terms of GDP share) have shown more growth than larger states such as Maharashtra, Delhi, Tamil Nadu and Gujarat, FIDC said in a statement.