Emerging Opportunities in India Consumer Finance Industry Discussed by BRICdata

11 Jun 2012 • by Natalie Aster

The Indian consumer finance market recorded a compound annual growth rate (CAGR) of 16.40% during the review period (2007–2011). It is projected to retain a high CAGR of 14.55% over the forecast period (2012–2016). The strong growth will be driven by the country’s improving macro- and micro-economic fundamentals, and by the increasing domestic demand for consumer finance services.

India’s rising employment levels are expected to generate more demand for consumer finance in the country. According to the report “Emerging Opportunities in India Consumer Finance Industry: Market Size, Strategies, Products, and Competitive” by BRICdata, the unemployment rate in India is projected to decrease from 6.6% in 2011 to 6.3% in 2016. The improving employment conditions in the country will encourage Indians to increase their personal consumption expenditure, which will create a higher demand for consumer finance products, such as personal loans, education loans, auto loans and mortgage loans. The country’s sustained economic growth, rising disposable income levels, affordable interest rates and tax incentives are the main macroeconomic growth drivers that are encouraging the housing loan category’s development in India.

Report Details:

Emerging Opportunities in India Consumer Finance Industry: Market Size, Strategies, Products, and Competitive
Published: May, 2012
Pages: 58
Price: US$ 1.950,00

Although the Indian consumer finance market registered significant growth during the review period, the market’s growth decelerated towards the end of the review period as a result of the country’s microfinance crisis caused by India’s strict regulatory environment. The Indian banking industry is well regulated, and contains 167 commercial banks. The banks operating in India include a mixture of both domestic and foreign businesses. Despite the fragmented nature of the Indian banking industry, the competitive landscape for the Indian consumer finance market varies significantly depending on each product category.

Key highlights of this title

  1. Housing loans was the largest category in the Indian consumer finance market, and it generated approximately 56.9% of the total market value in 2011. 
  2. The gold loans category was the fastest growing in the Indian consumer finance market during the review period. It recorded an impressive CAGR of 43.93% during the review period. 
  3. Education loans category recorded the second-fastest CAGR of 30.20% during the review period. This growth was primarily due to the rapid expansion of India’s education services, as well as the rising number of students choosing to travel aboard to access higher education. 
  4. The auto finance category recorded a strong CAGR of 18.85% during the review period 
  5. The Indian credit card loans category is in initial stage of development, and it recorded a poor CAGR of -0.28% during the review period. This was mainly due to the country’s high defaults rate, and the availability of other popular credit products in the Indian consumer finance market.

More information can be found in the report “Emerging Opportunities in India Consumer Finance Industry: Market Size, Strategies, Products, and Competitive” by BRICdata.

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