A TransUnion CIBIL research has found that consumer loan demand, which had seen a significant drop shortly after the November 8 demonetisation announcement, has largely recovered.

Also, initial indications of credit quality across portfolios show no immediate signs of deterioration. The research looked at the impact of demonetisation on credit demand for the period November 2016 to February 2017, and on loan originations and portfolio quality through January 2017, a press statement issued by TransUnion CIBIL said.

The statement said that following unprecedented consumer credit growth over the past four years, including loans for vehicles and homes, credit cards and other credit products, the announcement on demonetisation created short-term disruption in the demand for consumer credit. However, new data for the months following the November announcement indicate a strong rebound in demand for retail loans. “The steady growth in credit demand in the months following the demonetisation announcement indicates material growth opportunities in the retail credit sector in India. This is a promising indicator for the stability and growth prospects of our country’s credit industry and the economy overall,” said Amrita Mitra, Vice-President of Financial Services Research and Consulting at TransUnion CIBIL, in the statement.

While consumer demand for credit has largely rebounded, loan originations have been impacted by the event, with aggregate credit granted dropping 12 per cent in November 2016, compared to November 2015. This trend continued in December 2016, with loan originations down by 13 per cent, compared to the same month the previous year.

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