India Small Finance Banks – SFBs Continue To Strengthen Their Position In Credit Market: ICICI Securities

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Small Finance Banks are making strong inroads into credit market – their incremental market share in credit as at September 2021 stood at 8% versus outstanding credit market share at 1.1%.

Notably, even during Covid-19 phase, SFBs’ credit market share improved by 20 basis points between March 2020-September 2021. In past 3.5 years, SFBs have delivered robust 42% loan compound annual growth rate followed by private banks at 13% and foreign banks 8% while loan CAGR for public sector banks was lower at 2% during the same period.

In a short span of four years, SFBs have garnered 5.6% market share in small loans, sustaining at around 5.5-5.8% during past eight quarters. Their incremental market share in small loans, after enjoying more than 20% of the pie in recent quarters, moderated to 5.6% as at Sep-21.

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