- 43% of retail credit inquiries were made by consumers in the 18-30 year age group.
- From a location perspective, most inquiries (31%) still come from metro areas, but this proportion is slowly declining.
- Nearly one-third (32%) of consumers hold a prime credit score, up four percentage points from the same period in 2021.
In the quarter ending September 2022, for the very first time, those between the ages of 18-30 accounted for the largest proportion of inquiries – a measure of consumers applying for new credit cards, said the report named Credit Market Indicator (
“The fact that 43% of retail credit inquiries were made by consumers in the 18-30 year-old age group, compared to 38% in the same quarter in 2021, and 33% in the year before, indicates a major milestone in the evolution of India’s credit market, which now has stronger participation of younger consumers in the credit ecosystem,” says
Kumar added that increased access to credit is directly related to quality of life and financial empowerment of India’s youth – who he says are drivers of the country’s economic engine.
In the second quarter of FY23, credit demand remained robust, with a corresponding increase in originations as lenders continued to provide credit opportunities for millions of consumers across India, the report said.
Most of this is fuelled by consumption-led lending. Positive lender sentiment and consistent improvement in credit performance year-over-year also helped.
Where is the credit?
The most in-demand credit products during the quarter were personal loans, followed by credit cards.
Inquiry volumes for personal loans increased by 109% YoY, while inquiry volumes for credit cards increased by 102% YoY.
A continued feature of the retail credit evolution has been increased credit penetration. Between September 2019 and September 2022, credit penetration has improved across age groups.
Consumers in the 18-30 years age group who availed at least one credit product increased from 14% to 19%. In the 31-45 year age group, it increased from 26% to 35%. And among the 46+ year cohort, it rose from 23% to 32%
The number of inquiries emanating from rural areas has increased by one percentage point each year, from 20% in September 2020 to 22% of all inquiries in September 2022. Inquiries from urban and semi-urban areas have remained consistent at 21% and 26% respectively over the last three years.
Analysis of the latest CMI also shows a marked improvement in borrower profiles, with nearly one-third (32%) of consumers holding a prime credit score, up four percentage points from the same period in 2021. Over the same time, 38% of near-prime consumers improved their status to prime in the September quarter.
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