RBI data revealed that the share of female borrowers in total credit was pretty low at 10.7% in December 2023.
Introduction:
Recent data released by the Reserve Bank of India (RBI) sheds light on the evolving landscape of bank credit, with a notable increase in personal loans and lending trends across different segments of the economy.
Rising Share of Personal Loans:
The RBI’s latest data indicates a steady growth in banks’ credit to personal loans, with the share of personal loans in total credit reaching 30.9 percent in December 2023, compared to 28.6 percent in the previous year.
This suggests a growing demand for personal finance products among consumers.
Overall Credit Growth:
Bank credit growth recorded a notable increase, standing at 16.1 percent in December 2023. When considering the impact of the HDFC-HDFC Bank merger, the growth rate rises to 20.3 percent. This indicates a robust expansion in lending activities within the banking sector.
Rural and Semi-Urban Credit Trends:
Lending by rural and semi-urban bank branches remained consistent with overall credit growth trends.
These branches collectively accounted for 21.4 percent of total credit in December 2023, reflecting a balanced distribution of credit across different geographical areas.
Credit to Industry:
Credit to the industrial sector also experienced growth, increasing by 9.5 percent on a year-on-year basis in December 2023.
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This growth rate is comparable to the levels observed in the previous year, signaling stability in lending activities within the industrial segment.
Emerging Trends in Women Borrowers:
While the share of women borrowers in total credit remains relatively low at 10.7 percent, the RBI highlights a notable increase in lending to female borrowers.
Over the past seven quarters, loans to women have outpaced the growth in loans to male borrowers, indicating a positive trend towards financial inclusion and empowerment.
Conclusion:
The RBI’s latest data provides valuable insights into the dynamics of credit growth and lending patterns in the banking sector.
The rising share of personal loans, consistent credit growth in rural areas, and emerging trends in lending to women borrowers underscore the evolving nature of India’s financial landscape.
As the economy continues to evolve, monitoring these trends will be essential for policymakers and financial institutions alike.
