Over 16 crore Indians are credit-subordinated: study

Over 16 crore Indians were considered credit-eligible by the end of 2021, while half of the adult population was unattended, according to a new study by TransUnion Cibil.

Of the 81.4 crore-eligible population in the country, 40.8 crore or nearly 50 percent were credit-unpaid, while 16.4 crore or 20 percent were credit-underserved, according to the report “Empowering Credit Inclusion: A Deeper Perspective on Credit Underserved and Unserved Consumers.

However, the TransUnion CIBIL survey showed that there has been a significant increase in credit-served consumers, from $ 9.1 in 2017 to $ 17.9 in 2021. This brings the estimated credit-served levels from 12 percent to 22 percent of the adult population.

“The lack of credit scores and credit history for unsolicited consumers is an obstacle to obtaining credit, as many lenders are reluctant to grant credit to them without any credit history or score,” the study said, adding that for these traditionally non-scorable consumers, they face a ‘chicken or egg’ riddle on how to get the first credit product when they lack a credit history.

About five percent of consumers who started out as credit-assisted were found to have migrated to become more credit-active within a two-year window, it further states.

Unserviced consumers are those who have never had an open traditional credit product based on reported accounts in the TransUnion consumer credit database. Underserved consumers are those with a certain, but limited, credit presence.

“India’s retail credit market is undergoing rapid development supported by the speed and scale of digital transformation. This transformation combined with India’s demographic benefits has unleashed unprecedented opportunities for market growth and financial inclusion, ”said Rajesh Kumar, MD and CEO of TransUnion CIBIL, adding that the study aims to uncover the potential that exists for to drive faster and sustainable financial development. inclusion across India.

Published on

April 25, 2022

Leave a Reply

Your email address will not be published.