Maharashtra, Tamil Nadu and Karnataka Driving Indian Consumer Credit Market
New TransUnion CIBIL Industry Insights Report reveals consumer credit market trends
Mumbai, 24 September, 2018 – At the midpoint of 2018, three of the large Indian states – Maharashtra, Tamil Nadu and Karnataka – comprised nearly 40% of all retail lending* balances despite representing about 32% of the overall credit population share (source: TransUnion CIBIL database) and around 20% of the aggregate Indian population (as per Census 2011). The new Q2 2018 TransUnion CIBIL Industry Insights Report found this concentration of retail lending activity among the large states, with economic development and urbanization as the likely drivers of this trend.
Retail balances as of June 2018 were highest in Maharashtra at 5,502 billion INR–representing nearly 20% of all retail balances in India–followed by Tamil Nadu (2,774 billion INR) and Karnataka (2,749 billion INR). In total, the 10 largest Indian states represented 21,274 billion INR in balances, which comprised almost 76% of the total balance share. At the same time, the 10 largest balance markets made up 68% of the consumer credit population.
“It’s clear that the major urban areas of India are leading the charge for increased retail credit use,” said Yogendra Singh, vice president of research and consulting for TransUnion CIBIL. “These states generally have more urbanized areas and show more signs of economic development. As a result, consumers in these areas are utilizing various forms of credit to enhance their lives.”
Top 5 Indian States Driving Balance Growth
State/Credit Product |
Balances (INR Billions) |
Balance Share |
Consumers (Millions) |
Consumer Share |
Accounts (Millions) |
Account Share |
Maharashtra |
5,502 |
19.6% |
11.5 |
15.0% |
16.6 |
16.0% |
Tamil Nadu |
2,774 |
9.9% |
7.7 |
10.0% |
10.2 |
9.8% |
Karnataka |
2,749 |
9.8% |
5.8 |
7.5% |
8.8 |
8.4% |
Gujarat |
1,992 |
7.1% |
5.4 |
6.9% |
7.1 |
6.8% |
Uttar Pradesh |
1,742 |
6.2% |
5.1 |
6.7% |
6.6 |
6.4% |
Overall, TransUnion CIBIL found that retail lending balances increased by nearly 27% between Q2 2017 and Q2 2018. Personal loan balances (up 43%) and credit card balances (up 42%) grew at the highest rate of all major credit products in the last year. Average borrower balance growth for both of these credit products increased nearly 14% in that same timeframe.
Q2 2018 Metrics for Major Retail Lending Products
Credit Product |
Total Number of Accounts (millions) |
Year-over-Year % Change |
Average Balance Per Borrower (INR '000) |
Year-over-Year % Change |
Serious Delinquency Rates– Balance-Level |
Year-over-Year Basis Point Change |
Auto Loan |
9.5 |
19.0% |
398 |
7.8% |
2.83% |
(72) |
Home Loan |
12.3 |
25.5% |
1,694 |
3.3% |
1.82% |
16 |
Loans Against Property |
1.5 |
20.7% |
3,637 |
-0.4% |
3.04% |
65 |
Personal Loan |
14.2 |
28.3% |
249 |
13.9% |
0.56% |
(13) |
Credit Card |
35.1 |
24.8% |
36 |
13.8% |
1.73% |
22 |
* Serious delinquency rates are measured as 90 or more days past due
“Total balance growth was broad-based across all products, increasing by at least 23% year-over-year for all major products,” said Singh. “Balances growth was largely driven by volume (i.e. number of accounts) growth that rose at least 20% for most major credit products. The retail lending sector continues to expand strongly, as consumers are seeking credit and lenders are making credit available. With delinquency rates generally remaining at controlled levels, this points to a well-functioning consumer credit market.”
While total balances and account volumes rose, average consumer balances increased modestly. Low double-digit annual increases in average consumer balances of credit cards and personal loans was counterbalanced by continued declines in consumer durables and loans against property and more modest increases in vehicle financing products like auto loans and two wheeler loans as well as mortgages.
Loans against property was the only product category which witnessed a significant increase in serious delinquency rates, growing by 65 basis points (bps) year-over-year to 3.04% in Q2 2018. Delinquency rates rose modestly for home loans and credit cards and continued to decline for auto loans, personal loans and two wheeler loans.
“Increased use of credit and the consequent balance growth is beneficial for the Indian consumer credit market, but maintaining relatively low delinquency rates is just as important,” said Singh. “Indian consumers need to continue to show that they can manage their debt obligations, and this continued practice will likely result in more credit offers.”
Read the full report here: https://www.transunioncibil.com/resources/tucibil/doc/insights/reports/report-IIR-Q2-2018.pdf
About the TransUnion CIBIL Industry Insights Report
TransUnion CIBIL’s Industry Insights Report is an in-depth, full-population solution that provides statistical information every quarter from TransUnion CIBIL’s consumer bureau database, aggregated across virtually every live credit file on record. Each file contains hundreds of credit variables that illustrate consumer credit usage and performance. By leveraging the Industry Insights Report, institutions across a variety of industries can analyze market dynamics over an entire business cycle, helping to understand consumer behavior over time and across different geographic locations throughout India. Businesses can access more details about and subscribe to the Industry Insights Report at https://www.transunioncibil.com/insights-events
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 3000 members–including all leading banks, financial institutions, non-banking financial companies and housing finance companies–and maintain more than 1000 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 drive credit penetration and financial inclusion for building a stronger economy.
We call this Information for Good. For more information visit: www.transunioncibil.com