New Delhi, May 6: Credit cards have been gaining immense popularity in India. As of December 2019, the credit card industry portfolio stood at Rs 124,390 crore, a year-on-year (y-o-y) growth of 44 per cent, stated a report by CreditScape.
“Credit card, once considered a product of the affluent in major metros has expanded to a large variety of consumers in tier II and tier III cities as well. The Indian credit card portfolio has grown 44 per cent and active cards in force has increased by 25 per cent, respectively year on year,” said Navin Chandani, MD & CEO, CRIF High Mark summarising the CreditScape.
“The credit card industry has benefited from larger internet and smartphone penetration, advancements in e-commerce and alliances between Merchants & Banks in form of co-branded cards. Non-metro customers who were earlier conservative about personal debt and had limited access to credit cards are now warming up to the use of credit cards. This will solve for the under penetration in the market and presents a huge potential,” he added.
CreditScape is a quarterly publication from CRIF High Mark on Retail lending in India.
Active cards in circulation in India stood at 50.1 million, 25 per cent y-o-y growth and the average outstanding balance per card saw a y-o-y growth of 16 per cent.
According to the latest data published by the Reserve Bank of India, the size of the industry as of November 2019, stood at 54.4 million credit cards. The industry has expanded with a compound annual growth rate of 15 per cent in the last eight years and a 24 per cent growth in the last four years alone.
The report said overall volume delinquency in the credit card industry improved by 5 basis points in the last year.
As of Sep 2019, there are 3.25 crore active card borrowers, having grown with a CAGR of 22 per cent over four years.
Borrowers opting for a credit card for the first time (NTP) has increased by three times in a span of four years, standing at 64.4 lakh in FY 2018-19.
Credit card sourcing (by volume) has seen a largely steady quarterly growth between Q1 FY 2014-15 to Q4 FY 2017-18, increasing from 0.71 million to 2.87 million.
Credit card, once considered a product of the elite has expanded its reach to a large variety of consumers. The increase in the number of transactions over the years as well as their value along a common slope suggests that not only is the frequency of card usage increasing, consumers are also using cards for small value transactions.