A recent report by TransUnion CIBIL shed light on the growing number of credit seekers in the country. The report evaluates data between January 2019 and January 2021 of the total number of loan requests TransUnion CIBIL received from ‘New to Credit’ or NTC customers. According to the data accessed, there could be a whopping 10 million loan borrowers every year going forward. Read on to know more:
Specifics of NTC customers based on Age groups
The table defines the percentage of new credit consumer inquiries as per the age group they belonged to.
| Age Category | New to Credit Consumers |
| Under 25 years | 24% |
| 26-35 years | 35% |
| 36-45 years | 20% |
| 46-55 years | 13% |
| Above 55 years | 8% |
First-Time Borrowers – Why are Lenders Wary?
First-time borrowers do not have any record or history with credit bureaus. This makes lenders wary when lending loans or credit to these individuals as they cannot effectively access their repayment behavior. Thus, essentially increasing the lending risk for financial institutions. Also, check the cibil score online.
Overcoming the Hurdle
As a way to overcome the lending risk, financial institutions have come up with a novel solution. They use the profile of new credit consumers and compare the same with other similar shapes. Bureaus such as TransUnion CIBIL have gone a step further to provide a CreditVision NTC Score service to borrowers who seek credit for the first time. A score is generated between the range of 101-200. When an individual has a higher value, it indicates a good NTC profile with a reduced probability of default.
Types of Loans Sought by NTC Customers
As per the record trend, these were the loan types that were widely applied for by NTC consumers:
| Loan Type | NTC Consumers |
| Auto Loan | 24% |
| Consumer Durable Loan | 28% |
| Credit Card | 16% |
| Home Loan | 25% |
| Personal Loan | 18% |
| Two-wheeler Loan | 46% |
Why the Expected Spike in First Time Borrowers?
India is a nation that comprises a high number of millennials. A majority of the population of the country belongs to the age group of below 40 years. This group is also an up-and-coming section of society that is most likely to take a first-time loan or credit card from different financial institutions. It is this understanding that explains the high expected spike in first-time borrowers in the coming months. The provisions have been made owing to the NTC bracket being a large market. As mentioned through the report, the borrowers could make for 100 million each year.
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