Retail credit growth moderated for NTC customers in December qtr: Report

Consumption-led products are defined as credit cards, personal loans, and consumer durable loans

consumption, Credit, consumer durable loans, finance

3 min read Last Updated : Mar 27 2025 | 12:47 AM IST

Retail credit growth moderated further in the quarter ended December 2024 mainly among new-to-credit (NTC) consumers for consumption-led credit products, according to TransUnion CIBIL’s latest report.

Consumption-led products include credit cards, personal loans, and consumer durable loans.

Loan originations dropped 21 per cent year-on-year Y-o-Y in the quarter ended December 2024, compared to a decline of 2 per cent for consumers with existing credit. Originations are a measure of new accounts opened and are driven by both consumer demand and lender supply.

The cautious approach by lenders to the origination of consumption-led credit products disproportionately affected NTC borrowers as 40 per cent of these borrowers choose consumption-led products as their entry into formal credit, according to the report.

Bhavesh Jain, managing director and chief executive officer of TransUnion CIBIL said: “The acquisition strategies adopted by lenders in response to risk-adjusted returns for unsecured lending products have disproportionately affected the NTC segment, which represents first-time borrowers.”

“We have seen that sustainable credit growth can be achieved among NTC consumers by lenders who use advanced information analytics and technology-based solutions,” Jain added.

According to the report, the credit market indicator (CMI) for credit supply declined to 91 from 95 the same period the year before. A slower growth rate in originations across products and continued decline in originations to NTC consumers drove this change.

CMI is a measure of data elements that are summarised monthly to analyse changes in credit market health, categorised under four pillars: demand, supply, consumer behaviour, and performance.

Home loan and credit card originations also declined in the three-month period ended December 2024, while the growth rate for other retail loan products, while positive in the most recent quarter, was at a slower rate than in the same quarter in 2023.

The share of total loan originations by NTC customers dropped to 17 per cent in the October-December quarter of 2025-26 from 21 per cent in the same period last year. This decline is consistent across key product segments.

According to the report, balance level delinquencies for personal loans have stabilised for the first time since June 2023.

The 90-plus days past due balance-level delinquency rate for below prime borrowers for personal loans improved to 4.54 per cent in December 2024, a 31 basis point improvement for these consumers compared to 4.85 per cent in December 2023.

Jain added that, “Even though the positive turnaround in delinquencies may not be visible across all products yet, the trend may encourage lenders to actively seek out newer borrower segments while at the same time continuing to focus on risk-based lending. The need of the hour is to ensure that credit reaches the underserved and unserved segments of borrowers, while continuing to encourage responsible repayments by all borrowers.”