Loan sanctions by non-banking finance companies in urban areas shrunk by five per cent year-on-year (Y-o-Y) to Rs 2.09 trillion in the second quarter ended September 2023 (Q2FY24) from Rs 2.2 trillion in the same period of FY23. The tepid offtake in large ticket home credit and loans against properties has impacted sanctions in urban areas, according to K V Srinivasan, Co-Chairman, Finance Industry Development Council (FIDC). He is also Chief Executive, Profectus Capital Private Ltd.
Sequentially, loan sanctions in urban areas contracted by six per cent over the first quarter ended June 2023, FIDC data showed. FIDC is an industry lobby group of non-banking finance companies.
Sanctions in rural areas grew by 17 per cent Y-oY to Rs 1.14 trillion in Q2FY24 from Rs 0.97 trillion in Q2FY23. Sequentially, the sanctions were flat over Rs 1.13 trillion in Q1FY24. The performance in the semi-urban region was also steady, with 12 per cent YoY growth in sanctions in Q2FY24. However, sanctions in semi-urban areas shrunk by two per cent over Q1FY24.
The affordable home loan category, which is mostly concentrated in semi-urban and rural areas, is holding well, he added.
FIDC in a statement said the sanctions posted overall average three per cent growth year-on-year (Y-o-Y) in the second quarter ended September 2023. Auto, commercial vehicles (CV), commercial equipment, personal, two-wheeler, and consumer loans showed good growth. Home loans and equipment loans showed a negative trend.
