K V Srinivasan, co-chairman, of the Finance Industry Development Council (FIDC) said base effect aka high base of April-June 2022 (Q1Fy23), and a sharp decline in home loan sanctions impacted the growth in the first quarter (Q1Fy24). The growth in Q1Fy23 was very high as the industry was catering to a surge in demand after a slump during the pandemic period. The higher interest rates in the system have dampened the home loan offtake activity. However, the growth in unsecured loans and gold loans on a y-o-y basis has been steady.
The pace of sanctions at 5.7 per cent YoY for Q1Fy24 is low for the April-June period also as the pace has been over 15 per cent y-o-yin this quarter in a decade, Srinivasan said.
Sequentially, the sanctioned shrunk by 20.3 per cent over the quarter ended March 2023 (Q4FY23), data from Finance Industry Development Council (FIDC)-CRIF showed.
As for demographic distribution, the annualised growth was 11.6 per cent y-o-y in rural areas, 12.4 per cent y-o-y in semi-urban, and 2.2 per cent y-o-y in urban areas. Sequentially, all three showed negative growth in Q1FY24 over sanctions in the quarter ended March 2023 (Q4FY23).
In absolute terms, non-banking finance companies (NBFC) sanctioned Rs 3.51 trillion worth of loans in the first quarter of FY24 as against Rs 3.32 trillion in the same period a year ago. Sequentially, they shrunk from Rs 4.41 trillion sanctioned in the last quarter of FY23.