Delinquencies in consumer durable and personal loans dip in FY22, says report


Portfolio at Risk or PAR–the proportion of delinquent portfolio–of personal loans in the 31-90 days bucket saw a marginal dip from 2.3% to 2.2%, as per the report titled CRIF How India Lends FY22. PAR had increased from 1.6% to 2.3% in FY 2021 as a fallout of the outbreak of Covid-19 pandemic. The 91-180 days bucket too saw a fall from 1.3% to 0.8% in FY22, reaching the March 2020 level, whereas the over 180 days bucket remained the same at 3.2% between FY21 and FY22.

Delinquency rate of consumer durable loans improved significantly compared to personal loans. Consumer durable loans are a type of financing for household items, such as television, refrigerator, washing machine etc.

PAR for over 180 days period saw a notable fall from 9.5% in FY2021 to 2.8% in FY2022, an improvement from pre-pandemic PAR of 4% recorded at the end of March 2020. As for 31-90 days and 91-180 days buckets, par was recorded at 0.9% (down from 1.5%) and 0.6% (down from 2.4%), respectively.

“Though initial months of FY22 were impacted due to the spread of the Delta variant, localized nature of the lockdowns helped minimize disruptions to business activity. In addition, both the Central Government and the RBI announced a host of measures to contain the impact of the second wave on domestic economic activity. The Government focused on providing relief and credit flow to small business and other sectors that were affected by the pandemic. This resulted in more positive macroeconomic outlook across industries including financial services. As a result, FY22 witnessed tremendous growth in new loan originations across Retail, Microfinance and Commercial loans,” said Sanjeev Dawar, Managing Director, CRIF High Mark.

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