With the start of the festival season, lenders expect a further increase in demand for personal loans and many banks are now announcing special programs.
“The demand for credit from retail customers has picked up. With the low number of Covid cases in many parts of the country and the start of the festival season, increased interest in loans for items such as consumer durables as well as home loans and automobiles. Typically, this is the time when people invest in new homes and buy vehicles, ”noted a private bank executive.
Private sector lender Kotak Mahindra Bank has announced a 15 basis point cut in mortgage rates as a limited-time offer for the festival season starting September 10 and ending November 8.
The state-run Punjab National Bank and Bank of India have also announced festival loan programs, and many other lenders are expected to announce special festival offers in the coming weeks.
Fintech lenders have also reported an increase in demand for credit from retail customers.
“We are seeing an improvement in the demand for credit from the first quarter of 2021, supported by the economic recovery and the improvement of the domestic market due to the reduced risk of Covid-19. We are currently disbursing loans worth 120-130 crore per month steadily since July 2021, which is almost 70% higher than a year ago, ”said Yogi Sadana, CEO of CASHe, adding that with the festival season around the corner, he expects an increase in loan demand for purposes specifically related to marriage, travel, home improvement and the purchase of white goods .
Yezdi Lashkari, founder and CEO of Flexmoney Technologies, said there has been more than 4.5 times the annual growth in consumer credit disbursed through its network in the last quarter. “The main use of these loans is the purchase of electronics and household appliances, fashion and personal care, mobile, home and furnishings,” he noted.
In recent months, personal loans have grown at a steady pace, with most banks focusing on this book. According to RBI data, personal loans saw an accelerated growth of 11.2% in July 2021 from 9% a year ago, mainly due to higher growth in “loans for gold jewelry” and “vehicle loans”.