The share of personal loans in total credit increases to 27.7% in March

Working capital loan growth accelerated in successive quarters of 2021-22

The personal loan segment continued to perform well in FY22, with its share of total credit increasing further to 27.7% in March 2022 from 26.3% a year ago and 19.9 % five years ago, according to data from the Reserve Bank of India.

Credit growth (year-on-year) in the industrial sector accelerated to 4.8% in March 2022, from 2% in the previous quarter and negative growth for eight successive quarters previously, according to the ‘Quarterly Basic Statistical Return -1: Outstanding Credit from scheduled commercial banks – March 2022 report.

Growth in working capital loans (cash credit, overdraft and demand loans) accelerated in successive quarters of 2021-22 to reach 7.1% in March. Working capital loans, which accounted for a third of total credit, contracted in 2020-21.

Credit drawdown by the private business sector accelerated and grew by 5% (year-on-year) in March, compared to 1.2% in the previous quarter.

Bank credit growth

Lending to the household sector (including business owners, Hindu undivided families and partnership companies, among others) remained robust and its share in total credit stood at 53.8% in March (52, 6% in March 2021), according to RBI data.

Credit to female borrowers, who accounted for 22.5% of retail bank loans, grew by 13.9% in 2021-22.

Bank credit growth (year-on-year), which stood at 5.1% in March 2021, has increased in successive quarters of 2021-22 to double digits by March 2022, RBI said.

The weighted average lending rate (WALR) on outstanding credit decreased by 42 basis points in 2021-22 (91 basis points in 2020-21) and by 24 basis points in the quarter ended March 2022 (down 21 basis points during the fourth quarter of 2020-21).

Published on

June 27, 2022

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