India is truly banking with BankBazaar.com. In 2018, 169 million unique visitors came to our website to purchase financial products such as loans and credit cards, to compare options, and to read our well-researched articles on personal finance. The number won’t surprise anyone tracking internet growth in India: 500 million have logged on, and we’re primed to hit 700 million by 2021. They’re going online for every little need from ordering food, to booking rides, to purchasing financial products. Many are logging on from non-metros and rural areas- localities not serviced by bank branches.
Millennials, women, and Indians from smaller cities logging on for the first time are driving remarkable growth in loans and credit cards. In this report, we analyze the personal finance trends of 2018 and present our outlook on how India will bank in 2019.
There’s an increase in the base of borrowers fueled by easy access to loans via the internet. Taking a personal loan has become as easy as shopping online. So an increasing number of customers are logging on from non-metros
More first-time salaried borrowers in metros will go online to fulfill their borrowing needs. Their need for short-term loans will fuel the next wave of growth in borrowing. In non-metros, more first-time internet users will log on to buy financial products, thus boosting the average ticket size and triggering a wave of financial inclusion.
The modern Indian woman is financially independent and aspires to have a roof over her head. To help her, lenders provide attractively -priced loans. Hence, we see that the average loan size for women is higher compared to men. Also, the demand for the biggest loans comes from the metros.
According to a study, home sales will increase 16% in 2019 with a spurt in demand for affordable housing projects, fueled by women-friendly loan schemes, subsidies for first-time home buyers under PMAY, and the transparency brought about by RERA. However, the growth in demand for loans in the premium housing category will be slower compared to demand in the affordable housing category
When it comes to car loans, India is borrowing bigger. No longer content with small cars, the new Indian wants to make a statement with cars that are bigger, faster, and trendier.
The liquidity crunch in 2018 hit the automotive industry as well as the demand for auto loans. NBFCs finance 60% of commercial vehicle sales. The slowdown is likely to spill over into 2019. However, the long-term outlook remains positive, with a large number of young people joining the workforce.
There has been tremendous growth in the demand for lifestyle cards among women, under-25s, and non-metro applicants. Attractive discounts and deals on credit cards have fueled the demand for cards from first-time and non-metro users
Credit cards in circulation went up by nearly 50% between March ’16 and April ’18, while credit card transactions went up 24% between April ’17 and April ’18. Post demonetisation, a larger number of Indians, especially digital natives, prefer digital transactions over cash. This trend is likely to continue in the foreseeable future.
Oil price volatility strained the common man in 2018. Not surprisingly, we saw a massive spurt in demand for fuel cards across the board.
While the worst of the oil volatility seems to be behind us, policymakers aren’t completely ruling out another phase of volatility. If that happens, we may see sustained demand for cards with fuel benefits.
More Indians are fulfilling their globe-trotting aspirations, and helping them are travel cards that provide them accelerated air miles, travel rewards, insurance, and airport lounge access.
According to a report, Indians will account for 50 million outbound travelers by 2020. Non-metros now have increased domestic and international air connectivity. Today's young Indians are explorers and travel credit cards are their constant companions
India is going paperless. More Indians prefer opening accounts online to meeting bank salespersons and submitting physical documents
We had a minor setback in 2018 with the Supreme Court’s Aadhaar ruling. However, with the government looking to pass an amendment bill approving the voluntary use of Aadhaar for verification of customer identity, we believe young Indians will continue to buy personal finance products through paperless and presence-less channels. - Adhil Shetty CEO, BankBazaar