Demand for secured loans — home and auto loans — is expected to see a pronounced dip in the coming quarters as consumers look to stay liquid during the Covid-19 crisis. Products that provide like credit cards and will see moderate demand, according to credit information bureau

Unlike the slowdown a decade ago, demand for credit cards and will remain as consumers look to secure funds to bridge gaps in personal Their availability and market penetration are higher than earlier.

The prevalence of fintech firms has also introduced new, flexible product structures and enhanced access via digital channels. Equally, because of the nature of the Covid-19 crisis, there has been an increase in the need for digital payments, which credit cards facilitate.

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said consumers are reducing discretionary spending, and they will cut down on travel. The demand for secured products like auto and will likely remain weak for some time, it added. The lockdowns have had far-reaching implications. Consumers’ finances have changed dramatically, with many seeing pay cuts and lay-offs. There has been a sharp drop in consumer sentiment and consumption demand and spending have taken significant hits.

Abhay Kelkar, vice-president (research and consulting) TransUnion CIBIL, said the social, financial and economic impact of Covid-19 will be far reaching and will lead to a realignment of the retail credit market.

India’s retail credit market is still growing at a much higher rate than most others around the world. However, this is a global crisis and no economy is immune, Kelkar said.

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