De-Coding Banks’ Credit Growth- Semi-Urban Market, A Key Growth Driver, Metros Gradually Improving: ICICI Securities


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Bank credit sectoral deployment data for April 2022 suggests YoY uptick across all verticals –14.7% in retail credit, 11.1% in services, 10.6% in agri portfolio and 8.2% in industry.

Incremental bank credit accretion in the past 12 months was Rs 11.2 trillion, of which 50% was contributed by three components, viz., housing (18%), micro small and medium enterprise (18%) and non-banking financial company (14%).

Taking into consideration revival in credit demand and demographic diversity across India, we attempt to de-code factors driving credit growth in the recent past and emerging trends during pre and post Covid-19.

We looked at the key five-force factors namely –

  1. region,

  2. district,

  3. interest rate,

  4. ticket size (including small loans) and

  5. type of loans, to ascertain emerging credit growth trends.

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