Retail Credit Market

The period saw more demand for vehicle finance (two-wheeler loans and auto loans) and consumer durables; and this also led to an uptick in the CMI for demand to 95 from 92

RBI data shows retail credit growth slowed to 11.8% in August from 13.9% a year earlier, with housing, vehicles and credit card loans recording sharper moderation

The retail credit market continued to see a softening in the last quarter of 202425, as new loan originations (partly a measure of credit demand and supply) grew at a slower rate of 5 per cent in March 2025 against 12 per cent a year ago, according to a report. The slowdown was despite the RBI slashing its benchmark lending rate by 25 basis points to 6.25 per cent in February. This and other factors pushed the Credit Market Indicator (CMI) to a two-year low of 97, according to TransUnion CIBIL's June 2025 Credit Market Report. A higher CMI reading indicates improving credit market health, while a lower reading indicates a decline. "The muted demand was more pronounced among consumers 35 years old or younger. Consequently, the share of New-to-Credit (NTC) consumers that lenders supplied decreased by three percentage points during the same period, given that a large share of younger consumers constitute the NTC segment," it said. However, it said, signs of improving credit performan

Reserve Bank of India (RBI) data showed deposit growth moderated to 10.3 per cent in the fortnight ended March 21, 2025 (last fortnight of FY25), from 13.5 per cent in FY24

Balance-level delinquencies in credit card segment stood at 1.8 per cent in Q1FY25 - highest among all other credit divisions

In India, shift to private credit, Nishu said, started before the Covid era, driven by regulatory reforms including the Insolvency and Bankruptcy code, Real Estate Regulatory Authority (RERA) Act etc.

The Indian economy was witnessing a surge in retail credit growth. The credit growth is led by a well-diversified customer base, with reasonably good financial health conditions

The government sold its maiden retail dollar bonds in October 2021, when it raised $1.6 billion

They must also avoid applying for too many loans within a short span

Credit growth to the services sector accelerated to 17.2 per cent in August 2022 from just 2.1 per cent a year ago. It was mainly due to improved credit off-take to NBFCs and trade sectors.

Increased demand visible across consumption products

According to the report, credit inquiries also jumped 54 per cent during the said period

While there are tentative signs of recovery in certain areas of the shadow bank sector, a funding squeeze has kept borrowing costs high

The economy grew by just 5% in first quarter ended June 2019

China accounts for nearly half of all retail credit in the emerging markets with loan outstanding worth $6,142 billion at the end of December, 2017