CRIF data suggests that while the size of personal loan notes increased, the NPA also fell from 1.06% to 1.92%. The sharp drop in the size of the banknotes is also seen as a measure to limit NPAs.
“Lenders want to serve larger clients to control the NPA and improve the quality of the portfolio. In Gujarat, the average banknote size decreased sharply between 2019 and 2020, but it also increased the APN of this wallet, ”said Vipul Jain, vice president – product management and business intelligence, CRIF High Mark.
NBFC players attribute the increase in the size of personal loan notes used by professionals and businesses shortly after the foreclosure to cash requirements for business and domestic purposes.
“The Covid-19 pandemic has induced financial constraints which have made the past 18 months one of the most difficult periods of our lives. The economic downturn coupled with job losses has taken a heavy toll on many. Our Borrower Pulse report launched in March 2021 indicates that a strong sense of resilience was demonstrated by young people in the city of Ahmedabad in deciding to take full control of their financial future. The entrepreneurial spirit shown by such a large percentage of borrowers – who chose to start their own businesses during the pandemic – has led to a growth in the average size of the city’s loan applications, ”said Gaurav Chopra. , founder and CEO of IndiaLends.
According to the previous credit bureau report, personal loans across India saw a 23% increase in the number of female borrowers in the first nine months of 2020-2021 i.e. April to December 2020. Banks also experienced a similar trend in terms of personal loan underwriting during the pandemic year.
“During the pandemic year, people had to deal with emergency medical expenses. Many have even lost their jobs or suffered a sharp drop in their business or individual income, which has led to an increase in the use of personal loans, ”said Janak Rawal, secretary general of the Maha Gujarat Bank Employees Association. (MGBEA).