Early signs of stress in micro LAP, housing loans, CV portfolio: CIBIL

Festive spending and Goods and Services Tax (GST) changes drove credit growth in the economy across vehicle finance and consumer durables in the last few months

There are early signs of stress in micro loans against property (LAP), certain segments of housing loans, and commercial vehicle (CV) portfolio, even as overall asset quality remains stable, TransUnion CIBIL said during an interaction with the media on Monday.

 

In the micro LAP segment, delinquencies have increased 45 basis points (bps) on an year-on-year (Y-o-Y) basis to 3.3 per cent in September, noted CIBIL, a leading credit bureau.

 

In the two-wheeler (2W) loan segment, early delinquencies measured as 90+ DPD (days past due) rose 22 bps Y-o-Y to 2.2 per cent. There were also indications of growing stress in the CV segment.

 

“While overall asset quality remains stable, recent trends indicate emerging stress in specific loan segments such as micro LAP and small-ticket housing loans. There are also early signs of stress in the commercial vehicle segment,” said Bhavesh Jain, managing director and chief executive officer (MD&CEO), TransUnion CIBIL.

 

In the micro-LAP segment, 90+ DPD reported in 12 months on book rose 29 bps Y-o-Y to 2.2 per cent for originations in the quarter ended September 2024, which is higher than the overall LAP early delinquencies at 1.6 per cent. In small-ticket housing loans, early delinquencies rose 19 bps Y-o-Y to 0.8 per cent for originations in the quarter ended September 2024, which is higher than overall housing loan early delinquencies at 0.5 per cent.

 

With early delinquencies rising in micro LAP and small-ticket housing loans, proactive monitoring of these segments will be critical for lenders to mitigate risks and reduce stress, CIBIL said.

 

The festive spending and goods and services tax (GST) rate cuts drove the credit growth in the economy across financing of vehicles and consumer durables in the last few months.

 

Credit supply of assets such as home loans, auto loans, and consumer durable loans showed positive momentum in the September 2025 quarter, despite experiencing a decline last year. Property loan originations rose by 22 per cent Y-o-Y in the said quarter while gold loans rose by 57 per cent Y-o-Y and personal loans increased by 35 per cent Y-o-Y. Auto loans also witnessed 11 per cent Y-o-Y growth in originations.

 

“GST 2.0 was a much-needed step to stimulate economic growth, and its positive impact is evident in the improvement of consumer sentiment and the upward trend in credit demand. While fostering and sustaining this credit demand is crucial, it is equally important to promote responsible borrowing practices. Lenders must engage with consumers at multiple touchpoints to ensure financial discipline and sustainability to support healthy growth of credit in India,” Jain said.