Credit Uptake on Recovery Path as India Rebounds from Covid-19: BankBazaar Moneymood® 2021 report


Posted December 18, 2020 by raush7

DEMAND FOR LARGE HOME LOANS SLUGGISH BUT AVERAGE TICKET SIZE UP BY 10%

 
Mumbai, December 17, 2020: BankBazaar.com, India’s leading free credit score provider and online financial product marketplace launched the third edition of ‘BankBazaar Moneymood® 2021’. It is a review of credit purchase trends in India in 2020 and presents the outlook for 2021. As per the report, despite very lean months during the lockdown, the combination of economic revival and safe access to credit via Digital KYC is pushing credit uptake to trend towards 80% of pre-Covid numbers.

Data shows that every quarter of 2020 had a different story of resilience. The year started on a promising note, with the recession of 2019 beginning to ease off in the first quarter of 2020. However, the Covid-19 pandemic brought life as we know it to a grinding halt towards the end of March 2020. Consequently, priorities have changed, and it is evident that people are evaluating their spends and investments very closely.

The biggest casualty were investments in assets such as homes as people turned wary of spending and set aside major capital investments for later. However, continuance of PMAY benefits, choice inventory, slashed registration costs in some places, and record low interest rates on home loans were strong inducements to invest. These factors along with the change in social and work structure due to the pandemic also convinced investors to look at bigger properties and loans. Consequently, the average home loans ticket size saw a strong increase from Rs.23.82 lakh in 2019 to 26.41 lakh in 2020. The average ticket size for women went up from Rs.25.66 lakh to Rs.31.20 lakh compared with an increase from Rs.23.64 lakh to Rs.26.04 lakh for men. The contribution of home loans under Rs.30L also decreased to 68% from 72% last year.

The biggest drivers of recovery were the non-metros. In the credit card segment, their contribution grew by more than 20%. The non-metros were also ahead of metros when it comes to personal loans. The average personal loan ticket size was Rs.1.84 lakh in metros and Rs.2.09 lakh for non-metros. The share of non-metros for contactless credit products also went up from 20% in Q2 to 40% in Q3 and the trend continues in Q4 as well.

Adhil Shetty, CEO, BankBazaar said, “This year’s Moneymood® is a testament to Indian’s resilience. The world faced an unprecedented crisis this year and this was compounded by massive business continuity issues faced globally. Data shows that despite the odds, India is on the way to recovery as economic activity gets back on track. During these tough times, technology provided the solution to some very challenging problems. Digital KYC solutions facilitated by BankBazaar enabled people from cities across India access much-needed credit lines in a completely contactless manner at a time when physical contact was out of question. As India emerges from this crisis, BankBazaar will be right there with them, doing our bit to ensure smooth access to the right financial product, without disruptions.”

Credit cards plunged sharply in the wake of the pandemic but also recovered equally fast. The combined impact of last year’s recession followed by the pandemic drastically affected the new-to-workforce segment aged 25 or less. Job losses and salary cuts at one end and tightened credit policies at the other resulted in a drop of more than 50% in the under-25 segment.

Moneymood® 2021 is the third edition of BankBazaar’s annual report that highlights how different credit products such as personal loans, home loans, car loans, credit cards, etc., have fared across the last one year. The report, generated in-house by BankBazaar, has been compiled after analysing internal company data generated from over 265 million visits to BankBazaar’s website in 2020. It presents an accurate picture of India’s personal finance market in the year gone by and gives an idea of what to expect in the coming year. Trends are segregated based on metros & non-metros, gender and age.

BankBazaar.com is India’s first neutral online marketplace that gives instant customized offers on loans and credit cards. It also provides customers free consumer credit score on its portal. Over 50+ of India’s leading financial institutions have chosen to integrate themselves with the platform. Including this recent round, BankBazaar has so far raised USD 116M in funding from investors such as Experian, Eight Roads, Sequoia India, Walden International, WSV, and Amazon.
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Categories Banking
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Last Updated December 18, 2020