'Consumer lending growth slips to 13 pc in Dec quarter'

Consumer lending growth slipped for the sixth consecutive quarter to 13.1 per cent in December 2019 quarter, as compared to 23.2 per cent in the year-ago period, a credit information company said on Wednesday.

Amid the slowing growth, consumer loan delinquencies showed an uptick, with the NBFC (non-bank financial company) sector experiencing an aggravation of troubles and the loans against property (LAP) segment being most impacted, the data by Transunion Cibil showed.

It can be noted that retail or consumer credit has been pursued aggressively by lenders in the face of stress in the large ticket advances partly because of the segment's resilience.

However, the overall economic growth has slid to six-year low of 5 per cent and unemployment has risen to four decade high.

From a growth perspective, credit card and personal loan segments recorded growth rates of 40.7 per cent and 28 per cent, respectively, while auto loans, LAP and home loans recorded comparatively more moderate rates, it said.

The company's vice president of research Abhay Kelkar said consumer sentiment and wider macroeconomic pressures is dictating the demand scenario.

"Flattening demand for large-ticket asset purchases is causing slower asset finance loan originations, while consumers may be increasingly turning to consumption credit products to help finance day-to-day living expenses," he said.

In what can be a result of weak car sales, the loan growth for the auto sector slowed down to 10.3 per cent during December quarter, while despite the evident reverses in asset quality, the LAP portfolio segment grew 11.6 per cent, it said.

There was a "small increase" of 0.10 per cent in the overall delinquency levels, the credit information firm said.

Delinquencies in LAP portfolios moved up 0.52 per cent to 3.75 per cent from a 90-day overdue perspective, while from a 30-day overdue standpoint, the same was up 0.59 per cent to 8.42 per cent of the loans.

Overall delinquencies in the NBFC segment grew by 0.51 per cent, it said, adding that both auto and personal loans reported an improvement in asset quality for financiers.