According to a recent press report Crisil has said that the demand for retail loans is likely to be extremely strong in tier -II cities due to increased penetration and entry of more players.
a recent report by Crisil titled ‘Retail loan products: Opportunities and risks beyond the metros and mini-metros’ said that the retail loan markets profitable due to higher yields in spite of their volumes being smaller. The report also includes details of the details current market opportunities and likely growth prospects, across 15 tier-II markets including Bhopal, Coimbatore, Indore and Jaipur. At present, these market together account for 15% of the demand for retail loans in India. Retail loans include home loan, personal loan, car loan, mortgage loan etc.
Mr.Prasad Koparkar head – industry & customized research, Crisil Research said that stronger growth scenario, lesser competition, higher yields and profitability comparable to the larger cities make tier 2 markets an extremely attractive proposition for financiers.
Ajay Srinivasan, head – industry research, Crisil Research has opposed to the perception that all tier-II markets fare poorly in respect of asset quality. He said that in 8 out of the 15 cities studied, the level of NPAs compares favorably with the all-India average for all the five retail loan products.