According to the latest Credit Market Insights report by TransUnion CIBIL, new loan originations in India grew by just 5% year-on-year in the fourth quarter of FY25, marking a sharp slowdown compared to the 12% growth in the same period last year.
📉 Key Highlights from the Report
Consumer demand cools: The share of loan enquiries from borrowers under 35 years dropped to 56%, compared to 58% a year ago.
Unsecured lending slows: Credit card originations declined significantly, while personal loan growth moderated from 13% to 6%.
Secured credit stable: Demand for large-ticket home loans (above ₹1 crore) saw a 9% rise, showing preference for secured products.
📊 Credit Market Indicator at 97
CIBIL’s Credit Market Indicator (CMI), which tracks overall credit activity and health, dropped to 97—a two-year low—indicating a broad-based slowdown in credit demand and issuance.
✅ Improvement in Credit Quality
Despite the slowdown, asset quality showed signs of improvement:
Credit card delinquencies (90+ DPD) dropped to 2%
Personal loan delinquencies declined to 1.14%
Rural demand remained relatively resilient, with loan enquiries in non-urban areas increasing to 52% of total enquiries
🧾 Conclusion
The Q4 FY25 report highlights a significant moderation in India’s consumer credit market, particularly in unsecured lending. While younger and urban borrowers reduced their credit activity, secured loans and rural demand helped stabilize the overall market. The report reflects both economic caution and lender conservatism in a rising interest rate environment.
FAQs
Q1: What is the current growth rate of new loan originations?
New loan originations grew by 5% in Q4 FY25, compared to 12% in Q4 FY24.
Q2: Which segment saw the biggest slowdown?
Credit card and personal loan segments experienced the sharpest decline in new originations.
Q3: Has credit quality improved?
Yes. Delinquency rates for credit cards and personal loans have decreased compared to the previous year.
Q4: What does the drop in the Credit Market Indicator mean?
It suggests a weakening credit environment and declining momentum in new loan issuance across sectors.
published on 24th june
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