Decoding banks’ credit growth – a semi-urban market, a key driver of growth, the metro is gradually improving: ICICI Securities

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Data on the development of bank credit in the sector for April 2022 suggest growth on an annual basis in all verticals – 14.7% in retail loans, 11.1% in services, 10.6% in the agricultural portfolio and 8.2% in the industry.

The growing increase in bank credit over the last 12 months was 11.2 trillion rupees, of which 50% was contributed by three components, namely housing (18%), micro and small enterprises (18%) and non-bank financial companies (14%). ).

Taking into account the revival of credit demand and demographic diversity across India, we are trying to decode the factors driving credit growth in the recent past and emerging trends during and after Covid-19.

We looked at the key factors of the five forces, namely –

  1. region

  2. area,

  3. interest rate,

  4. ticket size (including small loans) and

  5. type of loans to identify emerging credit growth trends.

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