Consumption-led Lending Continues to Catalyze Credit Market Growth

Monitoring early delinquencies and leverage ratios is essential for sustained growth

Mumbai, India, 19 April 2023 – Backed by consumption-led lending, growth momentum remains high in India’s credit market, according to the findings of the latest edition of the TransUnion CIBIL Credit Market Indicator (CMI)* report. The report insights indicate that credit demand in the fourth quarter ending December 2022 remained robust, despite challenging global macroeconomic factors. CMI insights indicate a continued trend of consumers aged 18-30 accounting for the greatest share of new credit inquiries, while the share in demand from rural areas has also increased marginally.

The CMI, which provides India’s credit industry with a reliable and contemporary benchmark of retail lending health, reached a level of 100 in December 2022, up from 93 over the same period in 2021.

Speaking on the findings of this edition of the CMI report, the MD and CEO of TransUnion CIBIL, Mr. Rajesh Kumar, said, “India’s credit market is on a sustained growth trajectory and credit performance continues to remain strong. However, in view of the impact of global headwinds, it is crucial to continue to carefully monitor credit risk, especially early delinquencies and leverage ratios.”

The CMI is a comprehensive measure of data elements that are summarized monthly to analyze changes in credit market health, and are categorized under four pillars: demand, supply, consumer behavior, and performance. These factors are combined into a single, comprehensive indicator, and pillars can also be viewed in more detail individually.

Chart 1

CMI April 23




When selecting certain variables, year-over-year (YoY) movements are analyzed to remove the effects of seasonality. The increase in April 2021 CMI was temporary and driven primarily by an exponential increase in inquiries and originations in April 2021 compared to a lower base of April 2020. Inquiry and origination volumes increased YoY by 8.5 times and 5.2 times respectively in April 2021.The Dec 2022 CMI value is provisional and subject to revision as additional data are reported to the TransUnion CIBIL credit bureau.

CMI findings also show a marked increase in demand for credit cards and personal loans, indicating growing adoption of consumption-led credit products that provide convenience and liquidity. At the same time, the data shows a slowdown in demand for home loans, with a -1% year-over-year (YoY) decline in demand and -6% YoY decline in supply. This trend may signal that prevailing conditions like higher inflation and rising interest rates have impacted consumer sentiment, prompting a conservative approach in taking high ticket loans.

“With demand for consumption-led loan products growing, credit institutions have the opportunity to customize product offerings for consumers across age groups and socio-economic categories, to create long term value and trust,” explained Kumar.

Originations – a measure of new accounts opened and a function of both consumer demand and lender supply – fell slightly after the festive season peak of the third quarter of the year. Approval rates dropped across all loan types as lenders showed more caution than in prior quarters, in the context of global economic conditions. This is particularly true among new-to-credit (NTC) consumers, whom lenders typically approach with caution: approval rates for these consumers have reduced from 35% and 32% in December 2020 and 2021 respectively, to 24% in the fourth quarter of 2022.

Table 1: Loan approval rates in Q4 – 2021 and 2022

Type of loan

Q4 2021

Q4 2022

Home loan






Auto Loan



Two-wheeler Loan



Personal Loan



Credit Card



Consumer Durable Loan



* Approval rate is calculated as the percentage of accounts which were opened within the next 90 days of the enquiry for home loans,; (enquiry Month – Jul, Aug, Sep); and within the next 30 days of enquiry for all other loans. (Enquiry months –Sep, Oct, Nov)

Consumers are managing their credit repayments well to ensure continued access to liquidity

During Q4 of 2022, overall consumer-level serious delinquency (90 days or more past due) generally improved across products, except for credit cards. This improvement suggests consumers appear to be better managing their credit repayments, to preserve their continued access to the liquidity that credit products provide as they anticipate tough global macroeconomic conditions ahead.

In order to provide deeper insights on the performance of recent originations, TransUnion CIBIL presents vintage delinquency trends to the credit industry. Early delinquency measured in Q4 2022 for originations from Q2 2022 is lower than the previous year for most products. However, consumer durable loans and credit cards are seeing a gradual increase in early delinquencies. Vintage delinquencies on consumer durable loan originations from Q2 2022 are two times higher than they were in Q2 2021, while vintage delinquencies on credit cards are also marginally higher for the same period.

There is also some stress observed in recent originations of personal loans and consumer durable loans with vintage delinquency on these products being higher than the pre-pandemic period.

Table 2: Delinquency vintages measured at six months on book

Delinquency vintages***

Q2 2019

Q2 2021

Q2 2022

Home Loan








Auto Loan




Two-wheeler Loan




Personal Loan




Credit Card




Consumer Durable Loan




***Vintage delinquency is calculated as % of accounts ever 30+dpd in six months from origination.

Origination of Q2 2019, Q2 2021, Q2 2022, vintages measured in Q4 2019, Q4 2021, and Q4 2022

As lenders strategize for profitable growth, they need to identify consumers who are resilient and continue to leverage credit access while maintaining good performance. Lenders that have access to deeper consumer-specific insights can work proactively with targeted consumers to optimize portfolio profitability.


* The TransUnion CIBIL Credit Market Indicator (CMI) is an evolving model which is regularly reviewed to ensure the most relevant variables and their relative weighting are selected to best chart the credit health of India’s lending market. When selecting certain variables, year-on-year movements are analyzed to remove the effects of seasonality. The CMI is not a stationary index; hence the level in itself is not indicative of credit health. The CMI number needs to be looked at in relation to previous period(s) and not in isolation. A lower CMI number compared to the prior period represents a decline in relative credit health, while a higher number reflects an improvement.

About TransUnion CIBIL

India’s pioneer information and insights company, TransUnion CIBIL makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®. TransUnion CIBIL provides solutions that help create economic opportunity, great experiences, and personal empowerment for millions of people in India. We serve the financial sector as well as MSMEs, corporate and individual consumers. Our customers in India include banks, financial institutions, NBFCs, housing finance companies, microfinance companies and insurance firms.