why there is a great demand of loans and credit
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Explanation:Credit balances are growing, thanks to the increasing demand for credit cards and personal loans. In an economic slowdown where salary delays and job loss is inevitable, the rise in demand for consumption lending products seems quite obvious. A recent report shows a spike in outstanding balance on credit cards indicating that people are borrowing to meet their everyday expenses.
According to the India Retail Credit Trends report by TransUnion Cibil, consumer credit grew (at lower rates) in Q3 of CY 2019 fuelled by a spike in demand for categories such as personal loans and credit cards. However, overall balances across all consumer loan products increased only by 13% compared to 23.2% the last year. Demand for auto loans, home loans and loans against property fell between July and September 2019, while demand for consumption lending products increased.
Credit card balances and number of accounts increased by 40.7% compared to 29.8% during the same time last year. This pushed the total balances to ₹1,090 billion and the number of active cards in circulation to 44.5 million. New account volumes of personal loans recorded dramatic growth of 133.9% in Q3 2019 as consumer demand for the credit product continued to accelerate, said the report