Higher value drives gold and home loan growth, borrower addition slows

MUMBAI: India’s retail credit market is showing a widening gap between the number of borrowers being added and the value of loans being accumulated, with consumer durable loans driving new borrower acquisition while home and gold loans account for much of the portfolio growth.According to credit bureau CRIF's `How India Lends' report, home loan outstandings rose 10.5% year-on-year to Rs 45.5 lakh crore in Q1 FY27, while gold loan outstandings jumped 62.2% to Rs 21.7 lakh crore. Yet origination volumes for the two categories fell 17.3% and 25.6% quarter-on-quarter respectively, to 8.3 lakh home loans and 369.9 lakh gold loans.Consumer durable loans followed the opposite pattern. Originations rose 25.6% quarter-on-quarter to 287.0 lakh loans and 27.4% year-on-year. The segment accounted for 45.5% of all New-to-Credit borrower volumes in India, more than twice the share of gold loans at 18.3% and personal loans at 18.2%.The difference is reflected in ticket sizes. Consumer durable loans had an average ticket size of Rs 22,303 and accounted for just 0.7% of total consumption credit, with an outstanding portfolio of Rs 1.22 lakh crore. The Rs 10,000 to Rs 25,000 bracket accounted for 41.0% of originations, while loans between Rs 25,000 and Rs 50,000 accounted for another 23.4%.The segment’s active accounts rose 8.9% year-on-year to 11.3 crore. Lending also continued to spread beyond the largest cities, with Beyond Top 100 cities accounting for 43.5% of origination value in Q1 FY27, up from 40.8% a year earlier.Home loans, by contrast, are increasingly concentrated in larger-ticket borrowing. Loans above Rs 75 lakh accounted for 41.0% of origination value in Q1 FY27, up from 36.8% in Q4 FY25. Active home loan accounts increased only 3.9% year-on-year to 238.4 lakh, while originations fell from 10.1 lakh in the previous quarter to 8.3 lakh. First-time credit seekers accounted for just 1.0% of total New-to-Credit originations.Gold loans showed an even sharper divergence between volume and value. Loans above Rs 5 lakh accounted for 38.2% of origination value while representing only 9.1% of originations by volume. The average ticket size rose 37.5% year-on-year to Rs 2.17 lakh, helped by higher bullion prices and tiered Loan-to-Value limits.Although gold loan originations fell 25.6% quarter-on-quarter from 497.3 lakh to 369.9 lakh, their value increased 47.3% year-on-year to Rs 6,47,417 crore. The active portfolio rose 16.4% quarter-on-quarter and 62.2% year-on-year to Rs 21.70 lakh crore.The contrasting patterns suggest a two-stage lending funnel. NBFCs use point-of-sale consumer durable loans to source 87.4% of volume, providing low-ticket digital entry points for new borrowers. As borrowers establish repayment histories with credit bureaus, banks and housing financiers can offer larger home and collateralised gold loans, using rising asset values and larger ticket sizes to expand portfolios without a proportionate increase in new borrowers.Get the latest Business News and Live updates. Download the TOI app.