India Personal Loan Market is growing at a CAGR of 15.83% due to the Increasing Consumer Base across the Country

The personal loan market is witnessing significant growth due to the large consumer base and growth in fintech startup. This trend is further propelled by increasing peer-to-peer lending platforms.

According to the Markets and Data Research report, “India Personal Loan Market Assessment, By Region, Opportunities, and Forecast, 2018-2032F”, the India personal loan market is valued at USD 29.29 billion in FY2024 and is anticipated to reach USD 77.72 billion by 2032F, growing with a CAGR of 15.83% in the forecast period FY2025 – FY2032F owing to a growing number of data loss cases worldwide. For instance, according to a report by rating agency CRIF High Mark Credit Information Services, personal loan outstanding Y-O-Y growth is 25.6%, and active loan Y-O-Y growth is 34.3% from FY2023 to FY2024. Furthermore, active personal loans also grew from 95.18 million to 127.78 million from FY2023 to FY2024.

India personal loan market is growing due to various factors such as urbanization, digitalization, changing lifestyles and a rise in consumer spending. In the current scenario with the age of digitalization, consumers have started to spend more on lifestyles, for instance, buying expensive smartphones and watches, increasing spending on travel and weddings, etc.

India personal loan market has witnessed many changes over the span of years, from filling out papers, forms, and applications and waiting for days for loan approval to now getting instant approvals with just a few clicks on the smartphone and the loan amount being credited to the bank account within days. India with a population of over 1.4 billion people holds a large customer base in the realm of consumer personal loans and advances which is a boon for the key market players at every level and their geographical presence.

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Spread through 104 pages, the "India Personal Loan Market" report includes an in-depth TOC, over 25 market data figures, the latest market developments, key drivers and opportunities, and a thorough study of major company profiles. Moreover, the report offers strategic recommendations, pricing analysis, market share analysis, and value chain analysis in detail.

Key Takeaways:

• Due to the boom in the personal loans distribution and digital transformation in banking and personal finances in recent years, the India personal loan market is anticipated to grow exponentially.
• Technological innovation is playing a critical role as banks use innovations to speed lending operations, improve risk assessment, and reach previously unbanked and remote communities. This contributes greatly to the growth of credit operations.
• In the current age, where borrowers are looking for fast and convenient solutions to their needs in terms of personal loans, startups and platforms leverage various technologies to instantly help consumers, relatively to expedite the process.
• West and Central region holds a significant share of the India personal loan market and is estimated to experience robust growth in the forecast period due to its strong economic activity and business infrastructure, making it a key area for personal loan demand.

The India personal loan market is segmented into the following categories:

By Type: Secured Loans, Unsecured Loans

By Application: Short-term, Medium Term, Long-term  

By Age: Less than 30, 30 to 50, More than 50

By Employment Type: Business, Salaried, Others

By Distribution Channel: Bank Branches, Digital Lending Platforms, Direct Selling Agents, Non-Banking Financial Companies (NBFCs), Others

By Region: North, West and Central, South, East

Based on region, the West and Central region is holding a considerable share of the India personal loan market in 2024. The region is experiencing continuous growth and is expected to grow with a double digit CAGR in the forecast period, attributed to its strong economic activity and business infrastructure, making it a key area for personal loan demand. The South region follows closely driven by its rapidly growing economy and high disposable incomes. This region’s thriving sectors and increased financial services penetration further fuel loan growth.

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The key drivers of this regional distribution include economic development, increasing digital financial services, and the rising middle-class population.

Major Companies Operating in the India Personal Loan Market include:

• ICICI Bank Limited
• Tata Capital Financial Services Ltd
• Bajaj Finance Limited
• Poonawalla Fincorp Limited
• Housing Development Finance Corporation Limited
• Shriram Finance Ltd
• Muthoot FinCorp Ltd
• State Bank of India
• AU Small Finance Bank Limited
• Axis Bank Limited

Key players are making huge investments in new products and services to increase their market presence. For instance, In August 2024, HDFC Bank Limited is organizing a Mega Personal Loan Mela at over 755 branches across Punjab, Haryana, and Himachal Pradesh between August 5th and 7th, 2024, offering a 50% concession on processing fees during that period.

The market is highly competitive in almost every aspect of personal loans offering similar products and services at similar interest rates and terms and conditions and players are trying to compete on an improvised consumer experience and service. With the growing consumer base along with rising consumer needs and aspirations, lifestyle upgradation, and the need for flexible financial support is likely to drive the market in the forecast period. With widespread access to the internet and the proliferation of smartphones and digital devices, acceptance of digital payments will fuel online banking services for personal loans. In October 2024, ICICI Bank Limited partnered with PhonePe to offer instant credit on UPI to its pre-approved customers on the digital payments app. The partnership enables millions of pre-approved customers of ICICI Bank to activate short-term credit lines instantly on the PhonePe app and use it for UPI transactions in a seamless and secure manner. The bank offers a credit line on UPI for up to USD 2,300 with a repayment period of 45 days.

Additionally, In June 2024, JSW MG Motor India signed a partnership with Tata Capital to bolster channel-financing options for its dealers. The collaboration aims to support JSW MG Motor India dealers with Working Capital, Term Loans, Demo Car Loans, Leasing solutions, and off-Balance Sheet structured solutions, catering to their growing business needs.

“India Personal Loan Market Assessment, 2018 - 2032F” evaluates the future growth potential of the India personal loan market and provides statistics and information on market size, structure, and future market growth. The report intends to provide advanced market intelligence and help decision-makers make investment decisions for their organizations more strategically. Moreover, the report identifies and examines the emerging trends along with key drivers, challenges, and opportunities in India personal loan market.

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