Between the financials of 2015 and 2018, unsecured loans, including loans to individuals, small and medium-sized businesses (SMEs), and credit cards, experienced a compound annual growth rate (CAGR) of 27%, or almost four times the growth of bank loans of around 7%. This comes at a time when banks are reeling from the weight of bad business credit. As of March 2018, outstanding unsecured debt was around Rs 500 million, accounting for 26% of retail loans, up from 21% three years ago.
CRISIL Research expects the total unsecured loan portfolio to reach a CAGR of 24-25% to Rs 9.5 billion over the next three years, thanks to increased penetration in the next three years, in existing markets and a concentration growing number of lenders. in small towns.
The growth of this segment is due to a variety of factors, such as: