Kerala shows steady growth in Retail Loans

Demand for Gold Loans and Agricultural Loans highest in the state: TransUnion CIBIL analyses retail credit trends for the state of Kerala

Kochi, 24 Jan, 2017 – Retail Loans have seen steady growth in the state of Kerala, over the last two years, according to an analysis by TransUnion CIBIL. Demand for Retail Loan types like Loan against Gold and Agricultural Loan has been the highest in the state.

“Retail Loans have grown at 22.76% CAGR in Kerala, slightly higher than aggregate India CAGR of 21.54% over the last two years. Loan against Gold and Agricultural Loans form the highest consumed loan types in the state”, informed Harshala Chandorkar, Chief Operating Officer of TransUnion CIBIL.

Loan against Gold makes up almost 35% of the total retail loans availed in Kerala, closely followed by Agricultural Loans at around 30%, Two Wheeler Loans at 6% and Consumer Durable Loans at 5%. Mortgage Loans, Auto Loans, Credit Cards and Personal Loans form under 4% each of the total retail loan uptake in the state.

Speaking on the CIBIL Score ranges of credit active population in Kerala, Ms Chandorkar informed, “Almost 85% percent of the new loans provided in Kerala in the year 2016 were for consumers having CIBIL Score of 750 and above. This fact reemphasizes the importance of maintaining a high CIBIL Score and healthy credit history for availing faster and cheaper access to credit opportunities.”

Maintaining a high CIBIL Score is even more vital for availing faster and cheaper access to credit. Recently Bank of Baroda has started offering CIBIL score based lending rates to retail mortgage loan seekers, which involves providing differential rate of interest based on the borrower’s CIBIL score. Customers with a high CIBIL Score and strong financials may get loans which are at least 50-75 basis points cheaper than a customer with a low credit score.

“We will accelerate our efforts to increase awareness among consumers on the importance of a healthy CIBIL score and report for faster and more affordable access to credit,” added Ms Chandorkar. She was in the city for conducting a Consumer Awareness Program in association with Banking Codes and Standards Board of India (BSCBI) for driving awareness on the importance of credit discipline for availing faster and cheaper access to finance in the form of loans and credit cards. TransUnion CIBIL will continue to analyse credit application, origination and performance data to monitor how consumer behaviour is changing overtime.

About TransUnion CIBIL

TransUnion CIBIL is India’s leading credit information company and maintains one of the largest repositories of credit information globally. We have over 2600 members–including all leading banks, financial institutions, non-banking financial companies and housing finance companies–and maintain more than 600 million credit records of individuals and businesses.

Our mission is to create information solutions that enable businesses to grow and give consumers faster, cheaper access to credit and other services. We create value for our members by helping them manage risk and devise appropriate lending strategies to reduce costs and increase portfolio profitability. With comprehensive, reliable information on consumer and commercial borrowers, they are able to make sound credit decisions about individuals and businesses. Through the power of information, TransUnion CIBIL is working to support our members in driving credit penetration and financial inclusion for building a stronger economy.

We call this Information for Good.