“The share of NBFCs in annual originations to borrowers with less than Rs 3,00,000 annual income has continued to increase from 53% as of Mar 2018 to 86% as of Mar 2020, reducing only marginally to 78% as of Aug 2020,” the agency further added.
Personal loan borrowers between the range of Rs 3 lakh and Rs 6 lakh on an annual basis represented 18.97% of all loan originations between April and August, 2020 – which during FY 2019-20 stood at 17.77%. Loan originations of the income bracket fell from 17.64% in the financial year 2017-18 to 16.72% in the financial year 2018-19.Originations of personal loans from the income bracket of those earning Rs 6 lakh and Rs 10 lakh annually decreased continually from a double-digit to a single digit share between FY18 and August 2020, from 11.04% to 7.12%, respectively. Originations fell to its lowest at 6.55% during FY20.
Amongst the risks between the various income levels, CRIF noted “The volume delinquencies (91-180 DPD) for borrowers with low income of less than Rs 6,00,000 stood at nearly 5X that of higher income borrowers,” Volume Delinquencies in the “Very High Risk” Category stood at 8.59% for those earning more than Rs 24 lakh, which for those earning less than Rs 3 lakh stood at 23.06%.
Loan delinquencies, between 91-180 days past due, deteriorated from 0.9% to 2.64%, which was attributed to a surge in small ticket lending to ‘risky customer segments’.
Loans of less than Rs 50,000 carried a stress (by value) of 9.4%, which was mainly carried by NBFCs with 7.58% of share, followed by public and private sector lenders which had share of 0.44% and 0.41%, respectively.
Comparatively, private sector lenders had a stress of 0.48% of loans between Rs 50,000 and Rs 1 lakh and Rs 1 lakh and Rs 2 lakh, and 0.46% of loans between 0.46%. Public lenders, following stress from loans lesser than Rs 50000, had a stress of 0.22% from loans between Rs 50,000 and Rs 1 lakh.