subject: Retail Finance Disbursement To Touch Rs 4.a Pair Of Lac Crore By 2011-12 [print this page] The retail finance market in India has regained its lost sheen as loan disbursements in this space is seemingly to determine a 29 per cent annual growth and is expected to touch a whopping Rs 4.2 lakh crore by 2011-12.
"The massive untapped demand, let alone the rebound in profitability for financiers, is expected to spur a boom in retail finance in the coming years," Infrastructure lending major IDFC said in an exceedingly analysis report.
Not too so much in the past, regulatory forbearance and a cyclical downturn in the economy had taken the sheen off the lucrative retail finance industry. Pursuant to that, the market grew by a meagre 8 per cent over FY08-10 against around fifty per cent CAGR over FY05-08.
The growth in the retail finance disbursement would be largely driven by improving affordability, increasing propensity to consume and the very fact that the penetration level of retail finance loans remains low.
"We expect annual disbursements in the phase to accelerate to twenty nine per cent compound annual growth rate (CAGR) over FY10-12 to a whopping Rs 4.two lakh crore in FY12."
India, home to one of the planet's youngest population (480 million individuals under the age of 40 years), offers a excellent ground for proliferation of retail finance. On the rear of improving income demographics and thereby higher affordability, penetration of retail assets was on the rise.
The report further highlighted the fact that the higher income bracket in the country is growing faster. The number of households within the lowest income bracket has fallen in absolute terms from forty one million to thirty one million.
Besides, the proportion of house holds with annual income below Rs ten million falling to thirty six per cent from forty six per cent over FY10-fifteen, the report added.
"Burgeoning middle income households ideal marketplace for retail loans, at a time when asset prices are stable and affordability is rising," it said.
There are as several as 480 million Indians (or 41 per cent of population) in age group of fifteen-40 years with high material aspirations, on the rear of skyrocketing urbanisation. Besides, India has a high proportion of young people who don't seem to be cautious of borrowing.
There's ample scope to expand as auto penetration remains low, as conjointly the two-wheeler penetration. In mortgages there is ample scope to grow, besides credit card penetration conjointly lags, the report added.
by: Hayes Celestine
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