PERSONAL LOANS

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• Hiring of temporary staff to sell credit cards, personal loans continues to grow

  The demand for manpower to sell credit cards and loans in India is increasing, despite the Reserve Bank of India's stricture on unsecured loans and the growth momentum in personal loans tapering off in February. Frontline sales jobs from BFSI companies are 14-20% higher this month compared to a year earlier, with industry executives predicting that about 25,000-30,000 frontline sales personnel will be hired in the April-June quarter to cater to the rising demand in retail and unsecured loan categories.

  

• Monthly Credit Records: 16% uptick in overall outstanding loans in Feb'24

  The banking system is witnessing a strong loan growth. A recent report by 1Lattice revealed that there's been an uptick in overall outstanding loans, of around 16 per cent, in February 2024.

  

• NBFC co-lending AUM nearing Rs 1 lakh crore: Crisil

  A study of about 100 NBFCs, accounting for over 90 per cent of the sector's AUM, showed that personal loans alone account for about a third of the AUM, followed by housing loans at 20 per cent and unsecured MSME loans and gold loans each making up 13 per cent of the pie.

  

• NBFC home loan sanctions drop 2% in Q3

  NBFCs, meanwhile, witnessed a notable increase of six percent year-on-year (Y-o-Y) in loans sanctioned during the period.

  

• How will India's credit growth fare in FY25?

  Led by personal loans and economic expansion, the growth may be in the range of 14-14.5% for the next fiscal that begins on April 1.

  

• Collection efficiencies jump across asset classes, says ICRA

  Housing Loans and Loans Against Property pools have showcased steady collections in FY2024 so far attributed to the critical nature of the underlying collateral for the borrowers and advances in online collection methods.

  

• RBI steps up scrutiny of retail lending, targets top-up home loans

  RBI tightens supervision on retail lending, focusing on mortgage top-ups, algo-based credit models, and co-lending. It aims to manage risks in the financial system amid rapid credit expansion and global economic uncertainty. The RBI typically uses moral suasion - speeches, calls to bank executives, individual meetings - as initial steps to prod banks, before considering more assertive enforcement.

  

• NBFC sector witness uptrend in credit growth fueled by personal & agri loans: Report

  According to a recent report Mazars, after many regulatory actions and measures by the Reserve Bank of India in 2023, the NBFC sector has been compelled to reassess their capital allocation strategies, navigate the complexities of capital raising in a cautious investment climate and adapt to evolving interest rate scenario and geopolitical uncertainties. Given this, the NBFC sector has witnessed an uptrend in its credit growth in Q2 FY24, and the GNPA ratio of the sector has also improved.

  

• Is flexi loan or dropline overdraft better than a personal loan and conventional overdraft?

  Credit line in the form of an overdraft is preferred by many people as it gives them flexibility to repay as per their convenience and keep the interest cost low as they pay only on outstanding amount. A new version of this loan is now being offered by many lenders which is called dropline overdraft or a flexi loan. Before going for it you must know if it is better than a personal loan or conventional overdraft.

  

• FinTechs increase their share in personal loans market, account for 62% of sanction volume: Report

  According to a recent report by FinTech Association for Consumer Empowerment (FACE), FinTechs show a steady increase in its share in personal loans market, contributing to a third of overall active personal loans in Sept'23. Their primary focus has been on sizeable underserved segments with small-value loans.

  

• Slower growth seen in NBFC and other personal loans in December on RBI tightening

  Excluding the HDFC merger impact, the personal loans growth rate of banks reduced by around 270 bps to 17.7% in December 2023 on a y-o-y- basis.