The loan sanctions by non-banking finance companies (NBFCs) in the country rose by 12 per cent year-on-year (Y-o-Y) in the first quarter ended June 2024 (Q1FY25) with robust growth in segments like home, auto, and personal credit. Sequentially, however, loan sanctions shrunk by 11 per cent over the quarter ended March 2024 (Q4FY24), given the seasonality of business, according to the Finance Industry Development Council (FIDC).
FIDC data showed that in absolute terms, finance companies sanctioned loans worth Rs 5.08 trillion in the April-June 2024 period, up from Rs 4.54 trillion a year ago (Q1FY24). FIDC is the industry lobby group of finance companies.
Construction equipment loans showed a negative growth trend. By and large, most of the significant categories showed positive growth Y-o-Y, which is encouraging, FIDC said in a statement.
Gold loan sanctions were up 26 per cent to Rs 79,217 crore in Q1FY25 from Rs 62,834 crore in Q1FY24. Sanctions on personal loans grew 12 per cent Y-o-Y to Rs 71,306 crore from Rs 63,494 crore in Q1FY24, FIDC said.
Loan sanctions in the housing segment were Rs 50,826 crore in Q1FY25, up from Rs 47,084 crore in Q1FY24. Auto loan sanctions were Rs 25,022 crore, up from Rs 22,823 crore in the year-ago period. Consumer loan sanctions also grew to Rs 34,466 crore in Q1FY25 from Rs 29,885 crore in Q1FY24.
K V Srinivasan, co-chairman, FIDC, and chief executive officer, Profectus Capital, told Business Standard that generally the April-June period is a soft quarter. However, there has been an uptick in housing and auto loans, which is an encouraging sign. The satisfactory monsoon and soft rate regime will give impetus to capital expenditure and credit offtake in the second half. The Reserve Bank of India’s (RBI’s) stance on rates will also have a bearing on trends.
RBI’s caution on growth and practices in certain loan segments will play out, leading to moderation in the unsecured credit and gold loan segments, Srinivasan added.
First Published: Oct 02 2024 | 6:45 PM IST
