NBFC loan sanctions increase by 6% in Q3FY24, consumer segment up 30%

Home loans sanctions contract 2 per cent; consumer loans grow 30%

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Loans sanctioned by non-banking financial companies (NBFCs) increased six per cent year-on-year (Y-o-Y) in the third quarter ended December 2023 (Q3 FY24), led by consumption, gold, and personal segments in the festive season. Sequentially, loans fell by 4 per cent over the second quarter ended September 2023 (Q2 FY24), said an industry lobby in a statement.

Consumer loan sanctions grew by 30 per cent Y-o-Y in Q3 FY24, according to the Finance Industry Development Council (FIDC). Consumer loans worth about Rs 29,813 crore were sanctioned in Q3 FY24, compared to Rs 22,950 crore in Q3 FY23. Sequentially, sanctions grew by 14 per cent over Q2 FY24.

Gold loans also saw a 14 per cent Y-o-Y growth in sanctions in Q3 FY24. In absolute terms, sanctions were Rs 44,743 crore in Q3 FY24, up from Rs 39,305 crore in Q3FY23. Sequentially, they grew by eight per cent over Q2FY24.

The personal loan segment saw sanctions growing by 27 per cent Y-o-Y in Q3FY24. In absolute terms, sanctions grew to Rs 67,722 crore in Q3 FY24 compared to Rs 53,293 crore in Q3 FY23. Sequentially, sanctions were flat with just one per cent growth over sanctions in Q2 FY24, according to FIDC data.

Home loans showed a marginal contraction of 2 per cent Y-o-Y in Q3 FY24. On an absolute basis, home loan sanctions declined to Rs 47,199 crore in Q3 FY24 from Rs 48,122 crore in Q3 FY23. Sequentially, the contraction was much sharper at 13 per cent over Q2 FY24.

Mahesh Thakkar, director General of FIDC, said commercial vehicles and equipment loans and loans against property (LAP) are increasing, likely indicating a revival of capital expenditure.

The commercial vehicle category showed 17 per cent Y-o-Y growth in loan sanctions in Q3 FY24. Sequentially, such loans grew by just one per cent over Q2 FY24.

Sanctions for LAP loans grew by 23 per cent Y-o-Y. Sequentially, they expanded by six per cent over Q2 FY24.

Looking at the pace of activity in urban and rural areas in NBFCs, urban sanctions grew by just two per cent Y-o-Y, while rural sanctions grew by 14 per cent Y-o-Y, FIDC said.