Experian India is a leading credit-bureau in India and highlighted that retail unsecured lending is more concentrated in top-cities and nearly 60% of the loans were classified as Red-zone (i.e. higher Covid cases & longer lockdowns). While lockdowns are being relaxed, a reasonable part of lending and collections is still done physically, rather than digitally, hence it would reflect in growth and asset quality for lenders.
Mr. Sathya Kalyanasundaram echoed the high level of moratoriums across products and divergence across the lenders. He believes that this underlines the client-selection as well as capabilities to enhance analytics and build collection-machinery beyond credit-bureau scores. Interestingly, he pointed that borrower behavior indicates that borrowers who can repay, will actually pay-back all loans.
He highlighted that over the past month there has been a reasonable uptick in demand for consumer goods/ personal loans. Experian India's base case is that by October 2020, demand should revert to normalised levels. However, lenders are being very cautious on fresh lending so approval rates on applications are likely to be much lower. In the personal loan segment, he believes that ticket size of loans will fall as borrowers will also be more cautious and unlikely to borrow purely for lifestyle related loans
