CIBIL: Banks are lending wider and smarter

NAGPUR: After being tight-fisted following the slowdown of 2008, banks have once again begun actively lending on retail front, doling out personal loans and new credit cards, says a survey by Credit Information Bureau(India) Ltd (CIBIL). Since 2010, retail lending has jumped 150%. As many as 63% of the new borrowers are people below 35 years of age, says CIBIL data.

CIBIL has also made a state-wise comparison of age profile of borrowers. This shows Maharashtra has 21% of borrowers below the age of 26 years and 42% between 26 and 35 years, which is the highest number of young borrowers. The national average is 11% and 38% in these age categories respectively. Borrowers above 60 years make just 5% nationally.

CIBIL maintains the borrowers' repayment details which is referred to by the banks while processing loan cases. If a borrower had delayed payment or defaulted on any of the loans, a different bank processing his case can know this by referring to the CIBIL data.

Another comparison of 2008 with 2013 data shows the banks have preferred giving retail loans to only consumers with better credit record. CIBIL awards points to indicate the credit worthiness which has been taken as the parameter in the comparison. However, CIBIL has compared data related to 2008 and 2013 only and not for intervening years.

"Those having 700 points and above out of a total 900 are in the best category. Below 700 leads towards the doubtful to worse categories," said Harashala Chandorkar, senior vice-president of CIBIL. She was in the city to hold a meeting as a part of CIBIL's awareness drive.

            

In 2008, the loans granted to borrowers with a score over 800 were 26% of total retail lending. But in 2013, it went up to 62%. Those with a score between 750 to 799, made 57% of total borrowers in 2008 and it came down to 24.8% in 2013. At the same time, the worst category of less than 550 points formed 6.1% of the retail loans in 2008, which further came down to 2.5% in 2013.

A borrower can have access to his CIBIL score. Though repayment of loan in time is the only measure of awarding the points, the exact method of evaluation is not shared by CIBIL.
Visit- www.cibilconsultants.com
Source: Secondary