New-To-Credit consumers are first-time market entrants who have not established a credit history. A large share of younger consumers constitutes this segment. Waning credit demand was reflected by the fall in share of enquiries from borrowers aged 30 and below. Credit enquiries from this section of the population fell to 56% of total enquiries in the quarter ended March 2025 from 58% in the corresponding quarter in 2024.
Cautious lending practises with tighter risk profiling parameters by lenders also contributed to lower enquiries from borrowers.
Credit supply has seen a marginal increase from 92 in the quarter ending March 2024 to 93 in March 2025 with a shift towards higher-ticket loans, as per CIBIL. An upward spike in home-loans, particularly over Rs. 1 Cr and two-wheeler loans above Rs. 1.5 lakh show lender preferences leaning towards loans backed by high-value assets. However, for first-time borrowers, low-value personal and consumer durable loans often mark the entry-point into the credit market, possibly aiding the decline in the NTC share.
However, the recent change in monetary policy may stimulate growth in NTC consumption with repo rate cuts allowing lower interest rates on loans and relaxed lending practices. “As lending rates may correct following repo rate cuts by the Reserve Bank of India, we are likely to see improvement in credit supply for the home loan segment in particular,’’ affirms Mr. Bhavesh Jain, MD and CEO, TransUnion CIBIL.
