India Consumer Finance Market
India Consumer Finance Market, By Type (Secured Consumer Finance, Unsecured Consumer Finance); By Region (North India, South India, East India, West India), Trend Analysis, Competitive Landscape & Forecast, 2019–2029
- Published Date: November 2023
- Report ID: BWC23947
- Available Format: PDF
- Page: 200
Report Overview
The increasing popularity of digital banking and growing consumer preference toward the use of loans for purchasing consumer goods are projected to propel the expansion of the India Consumer Finance Market during the forecast period between 2023 and 2029.
India Consumer Finance Market - Industry Trends & Forecast Report, 2029
India consumer finance market size was estimated at USD 34.42 billion in 2022. During the forecast period between 2023 and 2029, the size of India consumer finance market is projected to grow at a CAGR of 32.34% reaching a value of USD 184.92 billion by 2029. Major growth drivers for the India consumer finance market include an increasing per capita income, high economic growth, rapid urbanization, and higher consumer spending power. One key driver of this growth is the growing preference among consumers for credit card usage. Credit cards offer various benefits such as reward points and promotional offers like movie tickets and flight booking discounts. Notably, the rising popularity of Equated Monthly Installments (EMIs) with 0% or low interest rates is expected to contribute to the growth of the Indian consumer finance market by 2024. Also, the market is likely to benefit from the easy availability of different types of loans, including home loans, car loans, and education loans, offered by both public sector and private banks and financial service providers. The impact of demonetization on the shift towards digital transactions has been positive, although its long-term effect on credit card usage has been moderate. Another driving force is that consumer durable finance is becoming more accessible through collaborations between large electronic retail chains like Croma and Vijay Sales and financial service providers like Bajaj FinServ and Tata Capital, thereby further boosting the market's growth prospects in the forecast period.
India Consumer Finance Market – Overview
The India consumer finance market refers to the sector of the Indian financial industry that specializes in providing various financial products and services to individual consumers. These financial products and services can include credit cards, personal loans, home loans, car loans, consumer durable finance, and other forms of credit and lending solutions. The market caters to the financial needs of individual consumers by offering them access to credit, facilitating purchases of consumer goods, and supporting various personal financial requirements. It is influenced by factors such as economic growth, consumer spending power, urbanization, and changing preferences for financial products and services.
India Consumer Finance Market
Growth Drivers
Growing Preference for Credit Cards
India's financial landscape is witnessing a significant shift, with growing consumer preference towards the use of credit cards becoming a prominent trend. The country, traditionally inclined toward debit cards, has experienced a remarkable surge in credit card adoption over the past decade. Simplified onboarding processes, personalized offers, and innovative mobile apps have contributed to this transformation, attracting both existing and new users. Credit card issuance has grown at an impressive CAGR of 19.8% from FY17 to FY22, even amidst challenging economic conditions. The shift towards credit cards is further evidenced by the increasing monthly PoS transactions and transaction values. These trends underline the changing dynamics of consumer finance and its impact on India's financial landscape. As more individuals embrace the convenience and flexibility of credit card usage, the India consumer finance market is experiencing a significant boost. Credit cards provide consumers with immediate access to credit for various expenses, leading to increased consumption. Furthermore, they offer rewards, cashback, and loyalty programs, making them an attractive choice. This trend not only promotes financial inclusion but also drives competition among financial institutions, resulting in innovative offerings and improved access to credit, ultimately fueling the growth of the consumer finance sector in India.
Restraints
Lack of Financial Literacy among Most of Indian Consumers
India consumer finance market faces a significant hindrance in its growth due to the prevalent lack of financial literacy among the population. This dearth of financial awareness and education limits the understanding of complex financial products, thereby hindering individuals from making informed choices about consumer loans, credit cards, and other financial instruments. As a result, a considerable portion of the population remains excluded from the formal financial sector, relying on informal and often more expensive sources of credit. Bridging this literacy gap is crucial for expanding the consumer finance market, promoting financial inclusion, and ensuring that individuals can access and utilize financial products effectively.
Impact of COVID-19 on India Consumer Finance Market
COVID-19 pandemic adversely affected the India consumer finance market. Lockdowns, economic uncertainty, and disruptions to income streams led to a surge in loan defaults and delayed repayments. Financial institutions faced increased credit risk, necessitating stricter lending criteria. On the bright side, digital adoption accelerated, promoting online loan applications and contactless payments. Additionally, the Reserve Bank of India introduced regulatory measures to provide relief, including moratoriums and restructuring options. As the economy recovers, consumer finance is adapting to the new normal, emphasizing risk management, digital strategies, and financial inclusion to navigate the ongoing challenges.
India Consumer Finance Market
Segmental Coverage
India Consumer Finance Market – By Type
By type, the India consumer finance market is divided into Secured Consumer Finance and Unsecured Consumer Finance segments. The unsecured consumer finance type segment holds a higher share in the India consumer finance market. Unsecured loans, such as personal loans and credit cards, do not require collateral, making them more appealing to a broader range of consumers. This inclusivity is vital in a diverse country like India, where not everyone possesses significant assets for collateral. Furthermore, the convenience of obtaining unsecured credit through digital channels has accelerated its popularity. While interest rates may be higher, the demand for quick, hassle-free credit has driven the unsecured segment's dominance in the market. Also, the unsecured consumer finance segment includes personal loan, home improvement loan, credit card, consumer durable finance, and education loan.
India Consumer Finance Market – By Region
Regionally, the India Consumer Finance Market is segmented as North India, South India, East India, and West India.
Competitive Landscape
Major players operating in the India Consumer Finance Market include Bajaj Capital Limited, Birla Global Finance Limited, Housing Development Finance Corporation, ICICI Group, LIC Finance Limited, L & T Finance Limited, Mahindra & Mahindra Financial Services Limited, Muthoot Finance Ltd, Cholamandalam, and Tata Capital Financial Services Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.
Recent Developments
-
In September 2023 - Bajaj Auto Consumer Finance, a subsidiary of Bajaj Auto, received regulatory approval from the Reserve Bank of India (RBI) to operate as a non-deposit taking non-banking financial company (NBFC). This marks the second NBFC within the Bajaj group, alongside Bajaj Finance and Bajaj Housing Finance, both subsidiaries of Bajaj Finserv. Bajaj Auto sought the NBFC license to diversify into financing two-wheeler purchases of non-Bajaj Auto brands, as around 33% of vehicles purchased under the Bajaj Auto brand are currently serviced by Bajaj Finance. The move aligns with the increasing demand for credit, as various entities have pursued NBFC licenses to cater to this growing market.
-
In August 2023 - HDFC Bank Ltd announced its strategic move to expand its consumer finance services beyond home loans. The bank, following its merger with HDFC Ltd, is transforming 530 offices that were primarily focused on mortgages into full-fledged banking service centers. The aim is to tap into the growing demand for consumer finance in India, driven by rising retail customer needs. By offering a wide range of loans, including those for appliances, cars, and electronics, HDFC Bank seeks to meet the evolving financial requirements of its customers. The bank also plans to increase its focus on affordable housing and construction finance.
-
In June 2023 - Pepper Group, a global consumer finance company, announced a significant investment of USD 150 million over the next four years to establish a fintech company in India. This new venture, operating under the Pepper Money brand, aims to offer a range of personal finance products such as personal loans, credit cards, and BNPL (buy now, pay later) services. Led by Abhishek Kothari, who co-founded FlexiLoans, the company plans to launch in the second half of 2023, targeting 15 crore households in Tier 2 and 3 cities.
Scope of the Report
Attributes |
Details |
Years Considered |
Historical Data – 2019–2022 |
Base Year – 2022 |
|
Estimated Year – 2023 |
|
Forecast Period – 2023–2029 |
|
Facts Covered |
Revenue in USD Billion |
Market Coverage |
India |
Product/ Service Segmentation |
Type, Region |
Key Players |
Bajaj Capital Limited, Birla Global Finance Limited, Housing Development Finance Corporation, ICICI Group, LIC Finance Limited, L & T Finance Limited, Mahindra & Mahindra Financial Services Limited, Muthoot Finance Ltd, Cholamandalam, Tata Capital Financial Services Ltd |
By Type
- Secured Consumer Finance
- Unsecured Consumer Finance
By Region
- North India
- South India
- East India
- West India
- Research Framework
- Research Objective
- Product Overview
- Market Segmentation
- Executive Summary
- India Consumer Finance Market Insights
- Industry Value Chain Analysis
- DROC Analysis
- Growth Drivers
- Rising digital banking
- Growing consumer preference towards the use of credit cards
- Restraints
- Interest rate volatility
- Lack of financial literacy
- Opportunities
- Increasing disposable income
- Emerging fintech ecosystem
- Challenges
- Digital security and privacy concerns
- Regulatory compliance and stringency
- Growth Drivers
- Technological Advancements/Recent Developments
- Regulatory Framework
- Porter’s Five Forces Analysis
- Bargaining Power of Suppliers
- Bargaining Power of Buyers
- Threat of New Entrants
- Threat of Substitutes
- Intensity of Rivalry
- India Consumer Finance Market Overview
- Market Size & Forecast, 2019–2029
- By Value (USD Billion)
- Market Share & Forecast
- By Type
- Secured Consumer Finance
- Collateral Loans
- Housing Loans
- Auto Loan
- Unsecured Consumer Finance
- Personal Loan
- Home Improvement Loan
- Credit Card
- Consumer Durable Finance
- Education Loan
- Others
- Secured Consumer Finance
- By Region
- North India
- South India
- East India
- West India
- By Type
- Market Size & Forecast, 2019–2029
- North India Consumer Finance Market
- Market Size & Forecast, 2019–2029
- By Value (USD Billion)
- Market Share & Forecast
- By Type
- By Application
- By End User
- Market Size & Forecast, 2019–2029
- South India Consumer Finance Market
- Market Size & Forecast, 2019–2029
- By Value (USD Billion)
- Market Share & Forecast
- By Type
- By Application
- By End User
- Market Size & Forecast, 2019–2029
- East India Consumer Finance Market
- Market Size & Forecast, 2019–2029
- By Value (USD Billion)
- Market Share & Forecast
- By Type
- By Application
- By End User
- Market Size & Forecast, 2019–2029
- West India Consumer Finance Market
- Market Size & Forecast, 2019–2029
- By Value (USD Billion)
- Market Share & Forecast
- By Type
- By Application
- By End User
- Market Size & Forecast, 2019–2029
- Competitive Landscape
- List of Key Players and Their Offerings
- India Consumer Finance Company Market Share Analysis, 2022
- Competitive Benchmarking, By Operating Parameters
- Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
- Impact of Covid-19 on India Consumer Finance Market
- Company Profile (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
- Bajaj Capital Limited
- Birla Global Finance Limited
- Housing Development Finance Corporation
- ICICI Group
- LIC Finance Limited
- L & T Finance Limited
- Mahindra & Mahindra Financial Services Limited
- Muthoot Finance Ltd
- Cholamandalam
- Tata Capital Financial Services Ltd
- Other Prominent Players
- Key Strategic Recommendations
- Research Methodology
- Qualitative Research
- Primary & Secondary Research
- Quantitative Research
- Market Breakdown & Data Triangulation
- Secondary Research
- Primary Research
- Breakdown of Primary Research Respondents, By Region
- Assumptions & Limitations
- Qualitative Research
*Financial information of case of non-listed companies can be provided as per availability.
**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.
List of Figures
Figure 1 India Consumer Finance Segmentation
Figure 2 India Consumer Finance Market Value Chain Analysis
Figure 3 Company Market Share Analysis, 2022
Figure 4 India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Figure 5 India Consumer Finance Market Share, By Type, By Value, 2019–2029
Figure 6 India Consumer Finance Market Share, By Application, By Value, 2019–2029
Figure 7 India Consumer Finance Market Share, By Region, By Value, 2019–2029
Figure 8 North India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Figure 9 North India Consumer Finance Market Share, By Type, By Value, 2019–2029
Figure 10 North India Consumer Finance Market Share, By Application, By Value, 2019–2029
Figure 11 South India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Figure 12 South India Consumer Finance Market Share, By Type, By Value, 2019–2029
Figure 13 South India Consumer Finance Market Share, By Application, By Value, 2019–2029
Figure 14 East India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Figure 15 East India Consumer Finance Market Share, By Type, By Value, 2019–2029
Figure 16 East India Consumer Finance Market Share, By Application, By Value, 2019–2029
Figure 17 West India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Figure 18 West India Consumer Finance Market Share, By Type, By Value, 2019–2029
Figure 19 West India Consumer Finance Market Share, By Application, By Value, 2019–2029
List of Tables
Table 1 India Consumer Finance Segmentation
Table 2 India Consumer Finance Market Value Chain Analysis
Table 3 Company Market Share Analysis, 2022
Table 4 India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Table 5 India Consumer Finance Market Share, By Type, By Value, 2019–2029
Table 6 India Consumer Finance Market Share, By Application, By Value, 2019–2029
Table 7 India Consumer Finance Market Share, By Region, By Value, 2019–2029
Table 8 North India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Table 9 North India Consumer Finance Market Share, By Type, By Value, 2019–2029
Table 10 North India Consumer Finance Market Share, By Application, By Value, 2019–2029
Table 11 South India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Table 12 South India Consumer Finance Market Share, By Type, By Value, 2019–2029
Table 13 South India Consumer Finance Market Share, By Application, By Value, 2019–2029
Table 14 East India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Table 15 East India Consumer Finance Market Share, By Type, By Value, 2019–2029
Table 16 East India Consumer Finance Market Share, By Application, By Value, 2019–2029
Table 17 West India Consumer Finance Market Size, By Value (USD Billion), 2019–2029
Table 18 West India Consumer Finance Market Share, By Type, By Value, 2019–2029
Table 19 West India Consumer Finance Market Share, By Application, By Value, 2019–2029
Table 20 Bajaj Capital Limited Company Overview
Table 21 Bajaj Capital Limited Financial Overview
Table 22 Birla Global Finance Limited Company Overview
Table 23 Birla Global Finance Limited Financial Overview
Table 24 Housing Development Finance Corporation Company Overview
Table 25 Housing Development Finance Corporation Financial Overview
Table 26 ICICI Group Company Overview
Table 27 ICICI Group Financial Overview
Table 28 LIC Finance Limited Company Overview
Table 29 LIC Finance Limited Financial Overview
Table 30 L & T Finance Limited Company Overview
Table 31 L & T Finance Limited Financial Overview
Table 32 Mahindra & Mahindra Financial Services Limited Company Overview
Table 33 Mahindra & Mahindra Financial Services Limited Financial Overview
Table 34 Muthoot Finance Ltd Company Overview
Table 35 Muthoot Finance Ltd Financial Overview
Table 36 Cholamandalam Company Overview
Table 37 Cholamandalam Financial Overview
Table 38 Tata Capital Financial Services Ltd Company Overview
Table 39 Tata Capital Financial Services Ltd Financial Overview
Market Segmentation
To request a free sample copy of this report, please complete the form below.
We value your investment and offer free customization with every report to fulfil your exact research needs.
Frequently Asked Questions (FAQs):
RELATED REPORTS
WHY CHOOSE US
-
24/7 Research Support
Get your queries resolved from an industry expert. Request for a free product review before report purchase.
-
Custom Research Service
Ask the Analyst to customize an exclusive study to serve your research needs
-
Quality & Accuracy
Ask the Analyst to customize an exclusive study to serve your research needs
-
Data Visualization
As the business world is changing dynamically every day. We need to stay pin point in relation to data management and optimum data utilization
-
Information security
We never share your personal and confidential information. Your personal information is safe and secure with us.