by Aakash Desai retail lending was “top of the pyramid business” within financial services with total credit growing by more than 5 times. The retail financial services industry has witnessed the emergence of players across the value chain offering personal loans, auto loans and housing finance in addition to financing consumption needs of India’s aspirational middle class. The emergence of Fintech companies with digital products and cutting- edge technology platforms has been a key catalyst. The onset of Covid-19 health crisis and its aftermath have resulted in a tectonic shift in traditional lending business models causing all lenders to accelerate their digitization initiatives, ring in strategic changes and reinvent their business models. The impact on credit cost, collections and recovery architecture and portfolio performance could translate into risk aversion amongst lenders, significantly higher credit provisions and could result in a lending slowdown, or a more cautious approach to retail lending as clarity emerges. While retail lending witnessed tremendous growth, corporate credit in India has had its share of cyclicality. The post-2008 financial crisis, corporate credit grew significantly underpinned by abundant domestic liquidity and an infrastructure-financing boom. The resultant NPAs have been a massive overhang since. Over the last few years,… Read full this story
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Mid corporate lending will be key to the next wave of growth in finservs, writes Aakash Desai have 308 words, post on bfsi.economictimes.indiatimes.com at December 7, 2020. This is cached page on CuBird. If you want remove this page, please contact us.