CIBIL Reports Sharp Deceleration in Retail Credit Growth Amid Weak Demand

According to data released by TransUnion CIBIL, retail credit growth in India has slowed significantly, driven by weakening consumer demand across major loan segments. The bureau’s Credit Market Indicator (CMI) declined to 91 for the quarter ending September 2024, down from 95 in the same quarter a year ago—a three-year low. Credit card originations saw the steepest drop among retail credit products, shrinking by 24 % year-on-year. Home loans for amounts up to ₹35 lakh also declined by about 12 %, though ultra high-value home loans (above ₹1 crore) bucked the trend and grew by 19 %. Interestingly, personal loans bucked the trend in originations (number of new loans), showing 11 % year-on-year growth. But in terms of the value of disbursed personal loans, they dipped by 5 %. CIBIL’s analysis indicates that lenders, wary of rising risks, are tightening credit assessment norms. With lower demand and stricter underwriting, the pace of retail lending is expected to remain restrained unless there’s a revival in consumer confidence.