Origination of personal loans, where a borrower avails credit without any security, doubled during the 2021 festive season as compared to three years ago, indicating an increased propensity among people to celebrate using such instruments, a report said on Thursday. Personal loan origination in value terms doubled to over Rs 1.47 lakh crore in December 2021 quarter as compared to Rs 75,000 crore in 2018, the report by Crif High Mark, a credit bureau, said.

It can be noted that typically, banks charge higher interest rates for such loans due to non-availability of any security. Defaults are also higher in the segment.

There was an increase in origination share in value terms for the state-owned lenders and the non-bank lenders in the three year-period, while private sector lenders witnessed a decline for the same.

However, when compared in volume terms, there was a decline in the share of public sector banks while the same for private banks and NBFCs saw an increase during the period under review, the report said.

In line with sales data showing demand resistance in the segment, two-wheeler loans saw a decline in origination in value terms to Rs 15,281 crore in the third quarter of FY22 from Rs 16,393 crore in FY19, the report said.

With respect to volumes in origination, there was a sharp 29 per cent decline to 20.4 lakh accounts in Q3 FY22, from 28.7 lakh accounts in Q3FY19, the report said.

Auto loans witnessed a flat growth in origination in value terms from Rs 54,367 crore in FY19 to Rs 56,420 crore in FY22, it said.

In the home loans segment, there was a 40 per cent increase in value terms to Rs 1.93 lakh crore in the October-December period for FY22 as compared to December quarter of FY19, it said, adding that private banks have been doing better on both value and volumes front.

Consumer durable loans achieved a 32 per cent growth in origination by value to Rs 26,075 crore in FY22 from Rs 19,683 crore in FY19.